(1) Which of the following shifts the investment curve upward? (a) An increase in disposable income. (b)...
Question:
(1) Which of the following shifts the investment curve upward?
(a) An increase in disposable income.
(b) A decrease in the rate of inflation.
(c) A decrease in the real interest rate.
(d) None of the above.
(2) Which of the following statements best represent the definition of the demand side equilibrium GDP?
(a) The demand side equilibrium GDP is the level of GDP at which there is no recession or inflation.
(b) The demand side equilibrium GDP is the level of GDP at which aggregate supply exceeds aggregate demand.
(c) The demand side equilibrium GDP is the level of GDP at which firms have no incentive to increase or decrease their total product.
(d) c and a.
(3) Which of the following cause(s) a decrease in the demand side equilibrium GDP?
(a) A stronger home currency.
(b) A weaker home currency.
(c) An increase in the real interest rate.
(d) a and c
(e) b and c.
(4) Which of the following shifts the investment curve downward?
(a) A decrease in disposable income.
(b) An increase in the value of our domestic currency.
(c) A decrease in the real interest rate.
(d) None of the above.
(5) Which of the following cause(s) an increase in the demand side equilibrium GDP?
(a) A stronger home currency.
(b) A weaker home currency.
(c) An increase in the real interest rate.
(d) a and c
(e) b and c.
Expert Answer:
1 c As the rate of interest is inversely proportional to the investment with a decrease in the re... View the full answer
