The investment demand curve is drawn with the amount of investment on the:
A. Vertical axis and disposable income on the horizontal axis
B. Horizontal axis and disposable income on the vertical axis
C. Horizontal axis and the expected rate of return and interest rate on the vertical axis
D. Vertical axis and the expected rate of return and interest rate on the horizontal axis
C. Horizontal axis and the expected rate of return and interest rate on the vertical axis
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The basic idea behind moral hazard is that ________
A) some economic transactions impose an additional cost on society B) some economic transactions give rise to an additional benefit to society C) people tend to take more risks if they do not have to bear the costs of their behavior D) people do not reveal their true preference for goods that are non-excludable in consumption
A subsidy is defined as
a. a payment that must be made to the government whenever a good or service is sold. b. the number of trades that are eliminated from a market when a tax is imposed. c. the difference between total revenue and total cost for a business firm. d. a payment to either the buyer or seller of a good or service, usually on a per-unit basis, when a good or service is purchased.
Gross domestic product (GDP) includes:
a. used goods sold in the current time period. b. only final goods and services. c. foreign goods as well as domestically produced goods. d. intermediate as well as final goods.
Which of the following is a business comparing when it analyzes the cost of buying wood desks versus the cost of buying metal desks:
A. Excess demand B. Relative price C. Inflated price D. Incentives