The planned investment function shows that
A. real gross investment falls as real Gross Domestic Product (GDP) increases.
B. at higher levels of planned saving, planned investment increases.
C. a positive relationship exists between planned consumption and planned investment.
D. a negative relationship exists between the level of planned investment and the interest rate.
Answer: D
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An unexpected increase in the demand for accountants will lead to
a. an increase in their earnings and an expansion in the future supply of accountants. b. a decrease in the incentive of students to prepare for a career in accounting. c. a reduction in the current earnings of accountants, followed by a reduction in the future supply of accountants. d. a reduction in the employment of accountants but not their wage rates.
Which of the following is an example of capital?
A) a gravel truck B) a savings account C) a share of General Motors stock D) a lake
The classical theory of the loanable funds market concluded that
A. Saving and investment would not be equal because of changes in the volume of bank credit. B. An increase in the desire to save would increase the interest rate and lower the volume of investment. C. The interest rate would equate saving and investment and thereby undermine Say's law. D. The interest rate would equate saving and investment and thereby cause Say's law to be valid.
Suppose compensation is given by W = 450,000 + 220 ? + 15S, where W = total compensation of the CEO, ? = company profits (in millions) = $300, and S = sales (in millions) = $500. What percentage of the CEO's total earnings is tied to profits of the firm?
A. 43.4 percent B. 12.6 percent C. 7.9 percent D. 6.0 percent