The accelerator theory can explain the paradox that both interest rates and investment rise and fall in concert during the business cycle if
A) the effect of changes in Y effect on In dominate the effect of interest rates on investment.
B) the LM curve is constant.
C) the IS curve is constant.
D) the effect of changes in interest rates on In dominate the effect of changes in Y on In.
A
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What kind of economic activity, involving the purchase of stocks rather than physical assets, has skyrocketed in the global market?
a. portfolio investment b. floating exchange rate c. agricultural exportation d. competitive devaluation
A method of forcing a company to internalize the total cost of production is
A) to impose a tax on the company to reduce production. B) to provide a subsidy to encourage production. C) for government not to interfere in the company's activities. D) to force the company to reduce the wages it pays to its employees.