1) A firm is ___ to engage in investment spending when the return on investment
ID: 1164310 • Letter: 1
Question
1) A firm is ___ to engage in investment spending when the return on investment is ___ than the cost of capital.
a.
likely and riskier
b.
likely and greater
c.
unlikely and greater
d.
likely and less
2)
A form of investment spending that is held for future sales or to manufacture items is ___.
a
savings
b
investments
c
physical capital
d
inventory
3)
The aggregate demand curve represents the relationship between prices and ___ demanded by all participants in a national economy.
a,
workers
b
output
c
goods
d.
services
4. If aggregate prices increase, then households and firms are more likely to hold ___ money for transactions, resulting in ___ money available for loans and ___ interest rates.
a
less, more and lower
b
less, more and higher
c
more, less and lower
d
more, less and higher
likely and riskier
Explanation / Answer
1. Likely and greater( in nvestment is greater if returns are more than cost)
2 inventory( inventories are kept in advance to meet unforeseen demand)
3 goods
4more, less , higher( higher prices mean higher transaction demand for money thus less will be saved and hence higher interest rates))
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