Q: During recessions investment Answer falls by a larger percentage than GDP. falls by about the same…
A: Recession refers to the situation of lower economic activity. All the economic activities will…
Q: Define the concept of rate of return on investment?
A: Rate of return on investment measures the net gain or loss of an investment over a period of time.…
Q: Explain Net present value with the formula.
A: Net Present Value Net present value basically refers to the difference between the current worth of…
Q: Determine the amount of national income. b. Determine the amount of national consumption. c.…
A: National Income is sum of consumption and investment. Y = C + I, where Y = National Income , C =…
Q: Give the equation for a linear consumption function?
A: According to the given question Simply we can say that a linear consumption function is an function…
Q: Explain the importance of circular flow of income in an economy...
A: According to the given question Circular flow of income is considered as an simple concept in…
Q: Define and explain the internal rate of return on a new investment?
A: Internal rate of return or IRR is a measure in economics of capital budgeting parlance and…
Q: Define the term Net Income?
A: The monetary benefit or reward earned by an individual or business by producing goods or services,…
Q: Final goods include only those goods which are consumed by the household True/False
A: Final goods are those goods which have a direct demand and thus are used as the end product.…
Q: Investment is aa. small part of real GDP, so it accounts for a small share of the fluctuation in…
A: Investment is a negative function of interest rates. It includes residential construction, business…
Q: What principle would be relevant to the understanding of variation of factors of investment in the…
A: We would be interested in learning more about the various factors of investment in the SR and LR. In…
Q: what are the causes of economic fluctuati
A: Answer -
Q: Problem 1A According to the new classical investment model we have: MPK =* (r + 8) (1) i. Derive the…
A: Solution:- i)
Q: PW on total investment. AE on total investment. a. b. C. FW on total investment.
A: Given: MARR=25% Number of years=10
Q: Discuss the lifecycle income hypothesis theory of consumption and explain its applicability in the…
A: As economies and societies developed, the study of economics got more complicated. Hence, as a…
Q: Describe nonsimple investment?
A: Non simple investment is a type of investment where more than one sign change occurs in the net cash…
Q: Problem 1A| According to the new classical investment model we have: MPK =(r + 8) (1) i. Derive the…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Define the term Projected annual net savings?
A: Projected annual savings means the estimated annual cost savings projected to be produced by a…
Q: What is Capital expenditure?
A: Capital expenditure refers to expenditure made by the firms in tangible assets such as land,…
Q: Explain how the income from production is distributed to labor and capital according to the…
A: It shows the division of National income among factors of production. The assumptions made under…
Q: Capital expenditures may not be deducted from gross income. O True O False
A: Capital expenditures are another term for the investment undertaken by firms to acquire capital…
Q: What is the Net-investment test?
A: Net- investment measures the company's assets and investment like property, software, plants and…
Q: 3. P falls, Y rises, N stays the same and W declines. Can all of this be the result of an increase…
A: At the point when financial experts allude to capital, they are alluding to the resources — actual…
Q: A society will put more investment on consumer goods than capital goods if it values more of present…
A: Consumerism is the possibility that expanding the utilization of goods and administrations bought in…
Q: Suppose investment is a function of income. Explain the impact of an increase in income on the…
A: Investment is key factor that drive up the economic growth of economy. More investment activities…
Q: Differentiate the Direct Investment versus Indirect Investments.
A: The economies tend to work upon the basis of the activities which are done by various entities.…
Q: Using the Tobin’s q theory, elaborate on the relationship between investment and capital stock?
A: In his q-theory of investment, James Tobin suggested that companies make investment decisions based…
Q: When we add depreciation to net investment, we arrive at...............
A: Depreciation: The term depreciation refers to the fall in the monetary value of a commodity over…
Q: Dissaving occurs when income is greater than saving income is less than consumption saving is…
A: Savings represent that part of a consumer’s income that is not used for consumption and is not paid…
Q: In Classical theory, Saving may increase due to decrease in Interest Rate
A: Classical economists tend to maintain that the economy is always capable to achieve the natural…
Q: Define the term Return on Investment?
A: Return on investment measures the performance which is used to evaluate the efficiency of an…
Q: Find the value of output if the given sales is $80 and the change in stock is $15??? National…
A: Generally in the given question, Sales amount is = $80 Change in the stock = $15 Value of output…
Q: Define the term the concept of return on investment?
A: Return on investment measures the performance which is used to evaluate the efficiency of an…
Q: With the help of consumption function C=10+0.5Y, calculate savings at an income level of $500
A: The consumer spending depends upon various factors such as income level, interest rate, age,…
Q: Looking at business fixed investment, explain why investment is negatively related to the interest…
A: An asset or object purchased with the intention of producing income or appreciation is referred to…
Q: What is the result of investments?
A: The amount of products purchased or accumulated per unit of time that are not utilised at the…
Q: When does the optimal investment schedule shift?
A: The ideal hazardous investment mix is regardless of wealth, non-capital income, age, and eagerness…
Q: Economics As a result of increase in investment, national income rises by 600 million. If marginal…
A: here we can calculate the increases in income by using multiplier formula which are as follow-
Q: a. Looking at business fixed investment, explain why investment is negatively related to the…
A: Fixed Investment is the purchase of fixed factors, like machinery, building, plant etc which helps…
Q: circular-flow model of a simple economy. The outer set of shows the corresponding flow of inputs and…
A: There are different types of sector model such as 2-sector model, 3-sector model, 4-sector model. In…
Q: Who gave the relative income hypothesis of consumption?
A: The relative income hypothesis implies that consumption of the current period is not dependent upon…
Q: Calculate the value of consumption of fixed capital from the following:- NNP at FC = 4,000 GDP at…
A: The given information is as follows:- NNP at FC = 4,000 GDP at MP = 5,000 Net indirect taxes = 300…
Q: Briefly explain whether each of the following statements is true or false. 7. A decline in total…
A: Solow Swan model explains the growth of output in the long run taking capital accumulation,…
Q: In the context of the Irving Fisher two-period model, if a person is a saver (i.e., C1 < Y1), a fall…
A: Answer: If a person is a saver and the interest rate falls then the future consumption (C2) will…
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- Use the following cumulative investment schedule to answer the next question. Expected Rate of Return Cumulative Amount of Investment (in billions)Investment is purely financial and has no impact on the level of employment in an economy. a. True b. FalseAn example of a stock variable is A. real GDP. B. consumption expenditure by households. C. gross investment. D. wealth.