Describe the relationship between intended investment and the level of national income
Intended investment is autonomous. That is, the level of national income does not determine investment but
future growth might. For example, if income is currently equal to $500 billion and is rising, firms will
probably be investing more than if income is equal to $600 billion but is falling. What is important is
producers' expectations about income levels in the future.
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In Keynes's liquidity preference framework, individuals are assumed to hold their wealth in two forms
A) real assets and financial assets. B) stocks and bonds. C) money and bonds. D) money and gold.
The tax incidence of a payroll tax results in an increase in net wages.
Answer the following statement true (T) or false (F)
Someone who holds a corporate bond ______.
a. owns part of a company b. is a creditor to a company c. owes money to a company d. is an employee of a company
An increase in demand will cause the equilibrium price and quantity to rise, ceteris paribus.
Answer the following statement true (T) or false (F)