If the expected profitability of a business activity increased we might expect investment spending to:
A. remain constant.
B. decrease.
C. increase.
D. there is not enough information to determine what would happen.
Answer: C
You might also like to view...
The September 11 attacks had the effect of shifting the
A) IS curve to the right. B) IS curve to the left. C) LM curve to the right. D) LM curve to the left.
Which of the following is not part of GDP?
a. the value of a new home built and purchased during the year b. the value of shares of Microsoft stock bought and sold during the year c. the value of long distance telephone services rendered during the year d. the value of new furniture produced during the year
A farm must decide whether or not to purchase a new tractor. The tractor will reduce costs by $2,000 in the first year, $2,500 in the second, and $3,000 in the third and final year of usefulness. The tractor costs $9,000 today, while the above cost savings will be realized at the end of each year. If the interest rate is 7 percent, what is the net present value of purchasing the tractor?
A. $6,764 B. $18,362 C. $9,362 D. None of the statements associated with this question are correct.
The impact of a decrease in expected inflation in the bond market will have a relatively large effect on the prices of bonds prices because the bond demand curve:
A. will shift right as will the bond supply curve. B. will shift left as the bond supply curve shifts right. C. and supply curves will shift left. D. will shift right but the bond supply curve shifts left.