An example of business fixed investment spending is
A) a purchase of a home by a household.
B) a purchase of a computer by an accounting firm.
C) a purchase of a bond by General Electric Corporation.
D) $200 million of unsold cars at a car dealership.
Answer: B
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Yvette buys and sells real estate. Two weeks ago, she paid $300,000 for a house on Pine Street, intending to spend $50,000 on repairs and then sell the house for $400,000 . Last week, the city government announced a plan to build a new landfill on Pine Street just down the street from the house Yvette purchased. As a result of the city's announced plan, Yvette is weighing two alternatives: She
can go ahead with the $50,000 in repairs and then sell the house for $290,000 . or she can forgo the repairs and sell the house as it is for $250,000 . She should a. keep the house and live in it. b. go ahead with the $50,000 in repairs and sell the house for $290,000. c. forgo the repairs and sell the house as it is for $250,000. d. move the house from Pine Street to a more desirable location, regardless of the cost of doing so.
Which of the following observations would be consistent with the imposition of a binding price floor on a market? After the price floor becomes effective,
a. a smaller quantity of the good is bought and sold. b. a larger quantity of the good is demanded. c. a smaller quantity of the good is supplied. d. the price falls below the equilibrium price.
Which of the following is correct?
a. A higher price level shifts money demand rightward. b. When money demand shifts rightward, the interest rate rises. c. A higher interest rate reduces the quantity of goods and services demanded. d. All of the above are correct.
Which lag stems from the fact that it takes time for people and firms to react to a policy change, to acquire or reduce loans, and to change their level of consumption?
A) the implementation lag B) the recognition lag C) the market lag D) the impact lag