When economists refer to investment expenditures they mean the
A. use of today's resources to expand tomorrow's production or consumption.
B. purchase of a consumer nondurable goods.
C. purchase of stocks or bonds.
D. production of intermediate goods.
Answer: A
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The averaging equation of elasticity solves the problem of
a. whether price or quantity is in the numerator b. which price or quantity to use as a base for calculating percentage changes c. whether to use quantity supplied or demanded d. removing the negative sign e. whether to use income or price in the denominator
What effect does the fixing of the nominal exchange rate have on the real exchange rate?
a. The real exchange rate is fixed at the same level. b. The nominal exchange rate is fixed, but the real exchange rate varies with relative income levels. c. The real exchange rate still fluctuates with relative international prices. d. None of the above.
You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50Which project has the lowest expected value?
A. A B. B C. C D. D
Governments have to rely on taxes for financing because
A. they cannot borrow unlimited amounts. B. they usually spend all of the gold reserves. C. they are not allowed to sell bonds. D. it is easier to collect taxes than to print money.