Which of the following would cause a movement along the investment function?
A. optimistic expectations about business conditions
B. technological progress
C. an increase in the rate of interest
D. a decrease in business taxes
Answer: C
You might also like to view...
In general, individuals and nations should specialize in producing those goods for which they have a(n):
A. absolute advantage. B. absolutely comparative advantage. C. absolute advantage and a comparative advantage. D. comparative advantage.
In the context of insurance, moral hazard refers to:
A. the tendency for people to behave in a riskier way after they have acquired insurance. B. the tendency for high-risk individuals to seek out more insurance than low-risk individuals. C. when people organize themselves in a group to collectively absorb the cost of the risk faced by each individual. D. when risks are shared across many different assets or people, reducing the impact of any particular risk on any one individual.
The laissez-faire free-market system is
A. an ideal of perfection. B. one that leaves no room for improvement. C. unmatched by any other system for allocative efficiency. D. All of the responses are correct.
Assume that consumption when young and consumption when old are both normal goods. The income effect of an increase in the interest rate will result in
a. an increase in saving when young. b. an increase in saving when old. c. a decrease in saving when young. d. a decrease in saving when old.