« previous next »

Author Question: Why does investment spending rise and fall with the overall level of GDP in the economy? What ... (Read 44 times)

Awilson837

  • Hero Member
  • *****
  • Posts: 509
on: Jun 30, 2018
Why does investment spending rise and fall with the overall level of GDP in the economy?
 
  What will be an ideal response?

Question 2

An example of a consumption tax is
 
  A) an income tax. B) transfer payments.
  C) the Social Security tax. D) a sales tax.
Macroeconomics: Principles, Applications and Tools ¦ O'Sullivan, Sheffrin, Perez ¦ 7th Edition
Buy Test-Bank


Tabitha_2016

  • Sr. Member
  • ****
  • Posts: 344
Reply #1 on: Jun 30, 2018
Answer to Question 1

If firms believe that GDP will continue to increase into the future, they may want to invest in anticipation of high future demand for their products. Similarly, if GDP falls and firms believe that this will continue into the future, they are less likely to invest, as their expectation of the future seems less lucrative.

Answer to Question 2

D


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

A strange skin disease referred to as Morgellons has occurred in the southern United States and in California. Symptoms include slowly healing sores, joint pain, persistent fatigue, and a sensation of things crawling through the skin. Another symptom is strange-looking, threadlike extrusions coming out of the skin.

Did you know?

Malaria mortality rates are falling. Increased malaria prevention and control measures have greatly improved these rates. Since 2000, malaria mortality rates have fallen globally by 60% among all age groups, and by 65% among children under age 5.

Did you know?

About one in five American adults and teenagers have had a genital herpes infection—and most of them don't know it. People with genital herpes have at least twice the risk of becoming infected with HIV if exposed to it than those people who do not have genital herpes.

Did you know?

Long-term mental and physical effects from substance abuse include: paranoia, psychosis, immune deficiencies, and organ damage.

Did you know?

Thyroid conditions may make getting pregnant impossible.

Nuclear division at the DNA level Nuclear division at the DNA level
Does this child have legs of different lengths or scoliosis? Look at the level of the iliac crests a Does this child have legs of different lengths or scoliosis? Look at the level of the iliac crests a
Fall Fall
This illustration shows the decibel level in various locations and associated with different ... This illustration shows the decibel level in various locations and associated with different ...
How much the temperature will rise depends on many factors that affect the level of GHG emission How much the temperature will rise depends on many factors that affect the level of GHG emission
Rising Sea Level Rising Sea Level
Video: Wound Care

For a complete list of videos, visit our video library