Which one of the following statements is TRUE?
A. The investment function is positively sloped to reflect the fact that lower interest rates cause more firms to expand their operations.
B. The investment function is positively sloped to reflect the fact that higher interest rates cause more people to invest their funds.
C. Along a given investment function, lower interest rates result in more investment projects being undertaken.
D. Along a given investment function, higher interest rates result in more investment projects being undertaken.
Answer: C
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Using the simple Keynesian model, consider the case where taxes are lump-sum. Compared to the model without taxes, the investment multiplier in this model will
a. not change. b. be larger. c. be smaller. d. be equal to 1
The Keynesian view is that the aggregate supply curve is vertical
a. True b. False Indicate whether the statement is true or false
When it is said that trade between nations can make both sides of the trade better off, this means that all citizens in each nation will benefit
a. True b. False Indicate whether the statement is true or false
Stock in Creole Cuisine Restaurants is selling at $25 per share. Creole Cuisine had earnings of $5 a share and a dividend yield of 5 percent. The dividend is
a. $0.25 and the price-earnings ratio is 5. b. $.25 and the price-earnings ratio is 6.7. c. $1.25 and the price-earnings ratio is 5. d. $1.25 and the price-earnings ratio is 6.7.