What is the difference between an economic investment and a financial investment?
What will be an ideal response?
An economic investment involves paying for new additions to the nation’s capital stock or new replacements for capital stock that has worn out. Examples of economic investments include roads, bridges, factories and houses. A financial investment involves buying or building an asset with the expectation that it will result in financial gain. A financial investment doesn’t distinguish between creating new capital stock and purchasing old stock. In most cases, when referring to an investment, people mean a financial investment.
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If the price of hamburger rises, we would expect the demand for steak to shift to the right
a. True b. False Indicate whether the statement is true or false
If product price increases, then:
A. MP will increase. B. MFC will increase. C. MRP will increase. D. MP will decrease.
Suppose that the marginal propensity to save (MPS) equals 0.2. The value of the multiplier would be
A. 2. B. 1.25. C. 20. D. 5.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point B to Point A is
A. -2/3. B. -3/4. C. -1.5. D. -20.