Autonomous expenditure is expenditure that is
A) influenced by the interest rate.
B) not influenced by the interest rate.
C) not influenced by real GDP.
D) not influenced by the price level.
E) influenced by real GDP.
C
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The multiplier for investment represents the ratio of the change in income to the change in investment spending
Indicate whether the statement is true or false
Two consequences of asymmetric information are adverse selection and moral hazard. An important distinction between the two is
A) adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. B) moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. C) adverse selection leads to an inefficient quantity while moral hazard leads to an efficient quantity. D) moral hazard leads to an inefficient quantity while adverse selection leads to an efficient quantity.