Answered: True or False: To economists,…

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Economics

True or False: To economists, investment means buying stocks and bonds. True False

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter23: The Aggregate Expenditure Model

Section: Chapter Questions

Problem 13P

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When 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
Consider an AS AD diagram. What would happen in the model if Stock values decreased? Group of answer choices a. AS shifts right and prices decrease while real GDP increases b. AS shifts left and prices increase while real GDP decreases c. AD shifts left and prices decreases while real GDP decreases d. AD shifts right and prices increase while real GDP increases
If firms are less optimistic that future profits will rise and remain strong for the next few years, then: Select one: a. investment spending will fall. b. investment spending will rise. c. investment spending will remain unaffected. d. investment spending will rise at first, then fall.
Identify how planned investment will change in each scenario. In an effort to reduce constant budget deficits, Congress announces plans to increase the corporate income tax rate. Due to the Congress, planned investment will increase, decrease, or stay the same? A major recession has reduced consumption spending, which has hurt profit levels for Aston-Benz, a high-end car manufacturer. Due to the recession, planned investment will increase, decrease, or stay the same?
How will planned investment spending change as the following events occur? a) The interest rate falls as a result of Federal Reserve policy. b) The U.S. Environmental Protection Agency decrees that corporation must upgrade or replace their machinery in order to reduce their emissions of sulfur dioxide. c) Baby boomers begin to retire in large number and reduce their savings, resulting in higher interest rates. Thank you very much for your help.
How does the stock market affect consumption according to the permanent-income hypothesis? Is this prediction in line with the empirical evidence? .
Suppose that an economy is operating at equilibrium and for some reason households begin to save a smaller fraction of their income. How will this affect equilibrium output in the future when planned investment rises and falls?
TRUE/FALSE The value of average propensity to save can never be greater than 1
Which statement most accurately represents the effect of rising stock prices on aggregate expenditure?
Calculate the marginal propensity to save when total saving increases from $200 billion to $300 billion as a result of increase in income from $900 to dollar $1200 billion.
State whether the statement is true or false The value of a average propensity to save can never be greater than 1
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.