A lower interest rate makes more investment projects feasible, meaning that
a. there is a direct relationship between the rate of interest and the quantity of investment spending
b. there is an inverse relationship between the rate of interest and the quantity of investment spending
c. there is no relationship between the rate of interest and the quantity of investment spending
d. the demand curve for investment spending is horizontal
e. the demand curve for investment spending is vertical
B
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Real capital income is given by ________
A) MPK × K B) capital share of income × output per unit of capital × capital C) capital share of income × output D) all of the above E) none of the above
If we observe that William's budget constraint has moved inward, then we know for certain that
a. his income must have decreased. b. he will be indifferent between goods X and Y. c. the price of one or both of the goods must have increased. d. his utility will decrease.