Which of the following are likely to increase investment and as a result, aggregate demand?
a. decreased demand for investment goods
b. falling real interest rates
c. rising real interest rates
d. increased business taxes
b
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A tax that imposes a small excess burden relative to the tax revenue that it raises is
A) an efficient tax. B) a payroll tax. C) a sin tax. D) a FICA tax.
Suppose that X and Y are complementary goods. If the price of good X decreases, we can expect the
a. demand for good X to increase b. quantity demanded of good Y to decrease c. quantity demanded of good Y to increase d. demand for good Y to decrease e. demand for good Y to increase
Poor Asian countries may have per capita GDPs that may be less than $250. Why is this somewhat misleading for comparative purposes?
A. Most rich country’s GDP is nonmarket activity. B. A significant amount of poor country’s GDP is nonmarket activity. C. Poor countries do not use dollars. D. Poor countries have few resources.
Refer to the graph shown. If market price is currently $7.00 per unit, this perfectly competitive firm will maximize profit by producing:
A. between 550 and 650 units of output. B. 850 units of output. C. 650 units of output. D. 450 units of output.