In a closed economy,
A) I = Y + C + G. B) I = Y - C - G. C) I = Y - C + G. D) I = Y + C - G.
B
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A lower interest rate makes more investment projects profitable, 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.
Discretionary fiscal policy in the form of an increase in government spending or a decrease in taxes can be used to close an expansionary gap
Indicate whether the statement is true or false