A decrease in the marginal propensity to save is likely to
A. Decrease physical capital investment.
B. Have no effect on physical capital investment.
C. Increase or decrease physical capital investment, depending on magnitude.
D. Increase physical capital investment.
Answer: A
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If the quantity of money supplied is greater than the quantity of money demanded, then the
A) price of financial assets falls. B) money supply decreases. C) nominal interest rate rises. D) nominal interest rate falls. E) price level falls.
On January 1, Rick's Photo owned $50,000 of equipment. During the year, the value of the equipment fell by $10,000, plus Rick bought $25,000 in new equipment. Rick's company experienced
A) an increase of net investment of $35,000. B) $40,000 of depreciation. C) $10,000 of depreciation. D) a change in total financial capital of $15,000. E) an increase of new capital by $10,000.