Investment is
A. spending by businesses on things which can be used to produce goods and services in the future.
B. spending by consumers on items that account for large shares of their budgets.
C. the purchasing of stocks and mutual funds.
D. the production of goods for immediate satisfaction.
Answer: A
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The domestic opportunity cost of producing a television in the United States is 20 bushels of wheat. In Korea, the domestic opportunity cost of producing a television is 10 bushels of wheat. In this case
A. the United States has a comparative advantage in the production of televisions. B. Korea has a comparative advantage in the production of wheat. C. mutual gains from trade can be obtained if the United States imports televisions from Korea and Korea imports wheat from the United States. D. mutual gains from trade can be obtained if the United States imports wheat from Korea and Korea imports televisions from the United States.
A tariff
A) makes everyone worse off. B) makes domestic consumers better off. C) makes domestic producers better off. D) makes both domestic producers and consumers better off.
When the Fed increases the money supply, interest rates:
a. rise. b. fall. c. are unaffected. d. rise and then fall. e. fall and then rise.
An expansionary fiscal policy can be illustrated by a(n):
a. Decrease in aggregate demand b. Increase in aggregate demand c. Change in the price level d. Increase in aggregate supply