Question 1

A reduction in the interest rate, while stimulating investment in the short run, has little or no effect on economic growth in the long run.

Accepted Answer

A) True 
 B)False

Question 2

Figure 14-2 
-Refer to Figure 14-2. Which panel represents the result of the selling of bonds in the open market by the Fed?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) , a movement from B to A
D)   Panel (c) , a movement from A to BE) None of the above
F) C) and D)

Question 3

Figure 14-2 
-Refer to Figure 14-2. Which panel represents the result of the purchase of bonds in the open market by the Fed?

Accepted Answer

A)   Panel (a) 
B)   Panel (b) 
C)   Panel (c) , a movement from B to A
D)   Panel (c) , a movement from A to BE) All of the above
F) None of the above

Question 4

Figure 14-1 
-Refer to Figure 14-1. Suppose the economy is operating on curve B and there is positive depreciation to its existing capital stock. The decision to produce at point r is likely to
I. shift the production possibilities curve slowly toward curve C.
II. shift the production possibilities curve slowly toward curve A.
III. reduce the economy's capital stock.
IV. result in a negative net private investment.

Accepted Answer

A)   I and IV only
B)   II and III only
C)   II and IV only
D)   II, III, and IVE) A) and B)
F) All of the above

Question 5

Which of the following is not a component of gross private domestic investment spending?

Accepted Answer

A)   An increase in business inventories
B)   The extensive renovation of an old factory building
C)   A consumer's purchase of a brand new condominium
D)   The purchase of stock in the General Electric CompanyE) A) and D)
F) A) and C)

Question 6

Which of the following is the largest and fastest growing component of gross private domestic investment in the United States between 1995 and 2011?

Accepted Answer

A)   Change in private inventories
B)   Residential investment
C)   Nonresidential equipment and software
D)   Nonresidential structuresE) A) and C)
F) None of the above

Question 7

For investment to occur, saving must also occur.

Accepted Answer

A) True 
 B)False

Question 8

A decrease in the interest rate will cause a(n)

Accepted Answer

A)   increase in the investment demand curve.
B)   decrease in the investment demand curve.
C)   movement up along the investment demand curve.
D)   movement down along the investment demand curve.E) None of the above
F) C) and D)

Question 9

Table 14-2
 
-Refer to Table 14-2. If the interest rate rises from 10% to 15%, what is the change in the amount of investment?

Accepted Answer

A)   More than $40 billion
B)   $40 billion
C)   $35 billion
D)   $5 billionE) A) and B)
F) A) and C)

Question 10

Table 14-1
 
-Refer to Table 14-1. If the market interest rate is 11%, the last project undertaken is

Accepted Answer

A)   Project Garron.
B)   Project Hattrick.
C)   Project Iroda.
D)   Project Jemma.E) A) and B)
F) A) and C)

Question 11

An increase in the cost of capital goods will generally cause an increase in investment by shifting the investment demand curve to the right.

Accepted Answer

A) True 
 B)False

Question 12

Net investment adds to the nation's capital stock.

Accepted Answer

A) True 
 B)False

Question 13

All other things unchanged, rapid advances in technology and the introduction of new products tends to

Accepted Answer

A)   have no effect on the level of investment.
B)   shift the investment demand curve to the left.
C)   have no effect on the investment demand curve.
D)   shift the investment demand curve to the right.E) None of the above
F) A) and B)

Question 14

Over the past two decades (1990-2011) , the bulk of gross private domestic investment has gone toward

Accepted Answer

A)   the purchase of new homes.
B)   building new residential structures.
C)   the replacement of capital that has depreciated.
D)   research and development.E) A) and C)
F) All of the above

Question 15

Explain the difference between a shift of the investment demand curve and a movement along the investment demand curve. Give one example of what causes a movement along the investment demand curve and one example of what shifts the curve itself.

Accepted Answer

A shift of the investment demand curve o...

Question 16

Which of the following will not a shift the investment demand curve?

Accepted Answer

A)   Expectations about future profitability
B)   The capacity utilization rate of capital
C)   The current stock of capital
D)   Changes in monetary policy that affect interest ratesE) A) and B)
F) C) and D)

Question 17

An increase in investment demand would most likely be caused by a(n)

Accepted Answer

A)   increase in the market interest rate.
B)   increase in the level of economic activity.
C)   increase in the cost of new capital goods.
D)   decrease in the expected demand for output.E) A) and D)
F) B) and D)

Exam 29: Exchange Rates and International Capital Flows

An increase in the cost of capital goods will generally cause an increase in investment by shifting the investment demand curve to the right.

Correct Answer
verified

Table 14-1 -Refer to Table 14-1. If the market interest rate is 11%, the last project undertaken is

Correct Answer
verified

Which of the following is not a component of gross private domestic investment spending?

Correct Answer
verified

Explain the difference between a shift of the investment demand curve and a movement along the investment demand curve. Give one example of what causes a movement along the investment demand curve and one example of what shifts the curve itself.

Correct Answer
Answered by ExamLex AI
A shift of the investment demand curve o...
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Figure 14-2 -Refer to Figure 14-2. Which panel represents the result of the selling of bonds in the open market by the Fed?

Correct Answer
verified

An increase in investment demand would most likely be caused by a(n)

Correct Answer
verified

Which of the following will not a shift the investment demand curve?

Correct Answer
verified

Over the past two decades (1990-2011) , the bulk of gross private domestic investment has gone toward

Correct Answer
verified

Figure 14-2 -Refer to Figure 14-2. Which panel represents the result of the purchase of bonds in the open market by the Fed?

Correct Answer
verified

A decrease in the interest rate will cause a(n)

Correct Answer
verified

All other things unchanged, rapid advances in technology and the introduction of new products tends to

Correct Answer
verified

A reduction in the interest rate, while stimulating investment in the short run, has little or no effect on economic growth in the long run.

Correct Answer
verified

Which of the following is the largest and fastest growing component of gross private domestic investment in the United States between 1995 and 2011?

Correct Answer
verified

For investment to occur, saving must also occur.

Correct Answer
verified

Net investment adds to the nation's capital stock.

Correct Answer
verified

Correct Answer
verified

Table 14-2 -Refer to Table 14-2. If the interest rate rises from 10% to 15%, what is the change in the amount of investment?

Correct Answer
verified

Exam 29: Exchange Rates and International Capital Flows

An increase in the cost of capital goods will generally cause an increase in investment by shifting the investment demand curve to the right.

Correct AnswerverifiedShow Answer

Table 14-1 -Refer to Table 14-1. If the market interest rate is 11%, the last project undertaken is

Correct AnswerverifiedShow Answer

Which of the following is not a component of gross private domestic investment spending?

Correct AnswerverifiedShow Answer

Explain the difference between a shift of the investment demand curve and a movement along the investment demand curve. Give one example of what causes a movement along the investment demand curve and one example of what shifts the curve itself.

Correct AnswerAnswered by ExamLex AIA shift of the investment demand curve o...View AnswerShow Answer

Figure 14-2 -Refer to Figure 14-2. Which panel represents the result of the selling of bonds in the open market by the Fed?

Correct AnswerverifiedShow Answer

An increase in investment demand would most likely be caused by a(n)

Correct AnswerverifiedShow Answer

Which of the following will not a shift the investment demand curve?

Correct AnswerverifiedShow Answer

Over the past two decades (1990-2011) , the bulk of gross private domestic investment has gone toward

Correct AnswerverifiedShow Answer

Figure 14-2 -Refer to Figure 14-2. Which panel represents the result of the purchase of bonds in the open market by the Fed?

Correct AnswerverifiedShow Answer

A decrease in the interest rate will cause a(n)

Correct AnswerverifiedShow Answer

All other things unchanged, rapid advances in technology and the introduction of new products tends to

Correct AnswerverifiedShow Answer

A reduction in the interest rate, while stimulating investment in the short run, has little or no effect on economic growth in the long run.

Correct AnswerverifiedShow Answer

Which of the following is the largest and fastest growing component of gross private domestic investment in the United States between 1995 and 2011?

Correct AnswerverifiedShow Answer

For investment to occur, saving must also occur.

Correct AnswerverifiedShow Answer

Net investment adds to the nation's capital stock.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 14-2 -Refer to Table 14-2. If the interest rate rises from 10% to 15%, what is the change in the amount of investment?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
Answered by ExamLex AI
A shift of the investment demand curve o...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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