According to the classical model, investment
A) is a function of the nominal GDP.
B) is inversely related to the interest rate.
C) is a function of real GDP.
D) is influenced by the money illusion at low income levels.
B
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The consumer's lifetime budget constraint states that
A) the present value of lifetime consumption must be equal to the present value of lifetime gross income. B) the present value of lifetime consumption must be equal to the present value of lifetime disposable income. C) the present value of lifetime consumption plus the present value of lifetime taxes to be paid must be equal to the present value of lifetime income. D) the present value of lifetime taxes to be paid by the consumer must be equal to the present value of government spending.
Which of the following is a TRUE statement?
A) All goods are economic goods. B) All economic goods are goods, but not all goods are economic goods. C) Economic goods and goods mean the same thing. D) Economic goods do not include services while goods do include services.