Which of the following is a primary implication of the accelerator theory of investment?
A) Net investment occurs when the desired and actual capital stocks are equal.
B) In order for gross investment to remain constant, income must remain constant.
C) Rising rather than high levels of output are necessary to maintain a high level of net investment.
D) B and C are both correct.
C
Economics
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The theory of portfolio choice indicates that factors affecting the demand for money include
A) income. B) nominal interest rate. C) liquidity of other assets. D) all the above.
Economics
A discount bond resembles a simple loan in that
A) the interest on neither is taxable. B) the borrower repays in a single payment. C) both represent assets to the borrowers who issue them. D) both have par values greater than their face values.
Economics