Practice Investment (4.1.2) - Determination of Income and Employment

Practise this section

9 questions

Flashcard drill
3 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
Sign up to start the exercise
Quiz
3 questions · about 2 min · pass mark 70%. Hints available.
Sign up to start the quiz

6 sample questions

Question 1.
Define ex ante investment.
Show hintHide hint
Think about what producers plan ahead.
Question 2.
What does the term 'investment' refer to?
Show hintHide hint
Consider both physical assets and stock changes.
3Question 3.
What is ex ante investment?
- Actual investment that occurs
- Planned investment
- Total demand in the economy
Show hintHide hint
Think about producer intentions.
4Question 4.
True or False: Physical capital includes raw materials.
- True
- False
Show hintHide hint
Consider what constitutes 'capital'.
Question 5.
In a hypothetical economy, if the market interest rate falls, explain how this would impact the investment behavior of firms and the ensuing effects on aggregate demand.
Show hintHide hint
Think about the relationship between costs and business decisions.
Question 6.
Given an investment multiplier of 5 and an increase in autonomous investment of 200, calculate the total change in aggregate demand.
Show hintHide hint
Use the multiplier to see how initial spending affects overall demand.

5 more questions in this section. Enroll free to practise them all.