n increase in interest rates will increase economic investment. 1) True 2) False b) The purchase of Amazon stock is a part of financial investment, but not of economic investment. 1) True 2) False
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- The above schedule indicates that if the real interest rate is 6 percent, then: Select one: a. $25 billion of investment will be undertaken. b. we cannot tell what volume of investment will be profitable. c. $40 billion of investment will be undertaken d. $30 billion will be both saved and invested.Looking at business fixed investment, elaborate on why investment is negatively related to theinterest rates.b. Using the Tobin’s q theory, elaborate on the relationship between investment and capitalstock?c. If the market value of firm A is $1.5 million and the replacement cost of capital is $450,000, find the Tobin's q.d. Should the firm replace capital? Elaborate on your response.Determine which of the two investment projects of Problem 5 the manager should choose if the discount rate of the firm is 30 percent. Additional information. Problem 5 states determine which of two investment projects a manager should choose if the discount rate of the firm is 10 percent. The first project promises a profit of $100,000 in each of the next four years, while the second project promises a profit of $75,000 in each of the next six years.
- In what direction will each of the following occurrences shift the investment demand curve, other things equal? a. An increase in unused production capacity occurs. b. Business taxes decline. c. The cost of equipment fall. d. Widespread pessimism arises about future business conditions and sales revenue. e. A major new technological breakthrough creates prospects for a wide range of profitable new products.If savings exceeds investment at full employment, demand will fall short of total output. True or FalseEconomic investment refers to ________. Question 4 options: A) postponing purchases of goods and services. B) selling a financial asset for a gain. C) buying a financial asset for a gain. D) making new additions to a firm's stock of capital.
- If business managers become more optimistic about future sales and profits, then there will be O no movement along or shift of the investment function an upward shift of the investment function a downward shift of the investment function a leftward movement along the investment function O a rightward movement along the investment function Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Investment spending in macroeconomics refers to: adding to productive capital and changes to inventory. adding to one's retirement account. buying stocks. buying newly issued shares of stock.Indicate whether the statement is true or false, and justify your answer. 1. The internal rate of return is defined as the interest rate that makes the net present value of an investment stream exactly equal to zero. 2. In part, physicians’ salaries are higher than secretaries’ salaries because it takes more years to train to become a physician than it does to become a secretary. 3. The fact that practicing surgeons who have finished residency earn more than practicing pediatricians implies that the rate of return to choosing surgery exceeds the rate of return to choosing pediatrics for a medical school graduate.
- Explain the short-run and long-run effects of an exogenous decrease in investment by explanation and using graphical analysis.investment A promises to pay £500,000 profit at the end of the first year, £550,000 at the end of two years, £600,000 at the end of three years, and £625,000 at the end of four years. Investment B promises to pay £25,000 profit at the end of the first year, £100,000 at the end of two years, £600,000 at the end of the third year, and £1,000,000 at the end of four years. Assume that nine percent per year is an appropriate discount rate for each investment. Also, assume a zero-scrap value for each investment at the end of four years. Determine which investment promises to be the better of the two for the companyWhen economists say “investment,” they are referring to financial investments, which are purely financial transactions, such as swapping cash for a stock or a bond. Select one: a. True b. False
