Investment spending is
A) directly related to the interest rate.
B) inversely related to the interest rate.
C) directly related to real disposable income.
D) inversely related to real disposable income.
Ans: B) inversely related to the interest rate.
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What is one reason existing firms might lobby the government to increase regulation in their industry?
A) It increases entry and exit costs, thereby reducing producer surplus to existing firms. B) It increases entry and exit costs, thereby potentially increasing producer surplus to existing firms. C) It increases entry and exit costs, but has no impact on producer surplus. D) Firms cannot be trusted to treat their customers fairly and ethically.
Which of the following statements is true?
A. A savings deposit is not counted in the most basic, or narrow, definition of the money supply. B. M1 is sometimes referred to as transactions money. C. Money reduces the transaction costs of making exchanges. D. b and c E. a, b, and c