What are the major factors that determine investment, and what impact does each have on aggregate demand?
Important factors that determine investment behavior are optimism, profits, interest rates, capital stock utilization rates, and inventories. Changes that increase investment lead to an increase in aggregate demand. Changes that decrease investment expenditures decrease aggregate demand.
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If gasoline prices rise by 20% and quantity demanded falls by 5%., then the price elasticity of demand is:
A) .05. B) .15. C) .20. D) .25. E) .40.
Hedging risk for a short position is accomplished by
A) taking a long position. B) taking another short position. C) taking additional long and short positions in equal amounts. D) taking a neutral position.
Capital is a term economists use to refer to
a. man-made resources used to produce other goods and services. b. resources that are available in nature such as mineral deposits. c. money that is used to consume goods and services, to distinguish it from money that is saved. d. the value of the best alternative to an action.
A system in which anyone collecting antipoverty program benefits must accept a government-provided job is called