The long run significance of investment is due to
a) its volatility
b) the importance of capital to economic growth
c) the effect of income on investment
d) the procyclical nature of investment
e) its ability to crowd-out government expenditures
b) the importance of capital to economic growth
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Holding all other factors constant, the quantity demanded of an asset is
A) positively related to wealth. B) negatively related to its expected return relative to alternative assets. C) positively related to the risk of its returns relative to alternative assets. D) negatively related to its liquidity relative to alternative assets.
Forecasts based on an economic theory as opposed to historical data are called
A) causal econometric forecasts. B) non-time-series forecasts. C) dummy forecasts. D) explanatory variable forecasts.