Refer to the Following Figure When Answering the Following Question

question 63

Multiple Choice

Refer to the following figure when answering the following question.
Figure 11.2: Growth Rates of Investment and GDP (Source: U.S. Bureau of Economic Analysis)
-Consider Figure 11.2. How does the investment function describe why investment is more volatile than the GDP?

• A) Firms are unpredictable.
• B) Investment does not include household residential expenditures.
• C) Inventories do not adjust to changes in business cycles.
• D) Firms do not have very good information.
• E) The marginal product of capital is included in the investment function.

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Definitions:

Descriptive Norm

The perception of what is commonly done in specific situations, often influencing people's behavior in social contexts.

Proscriptive

Pertaining to prohibitions, rules, or norms specifying what individuals should not do in a given context.

Injunctive

Relating to an authoritative rule or order which dictates expected or allowable behaviors.

Focus Theory

A theoretical framework that emphasizes how individuals allocate their attention and resources towards specific goals or tasks.