« previous next »

Author Question: Why does investment spending rise and fall with the overall level of GDP in the economy? What ... (Read 43 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?

People about to have surgery must tell their health care providers about all supplements they take.

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

Did you know?

Acetaminophen (Tylenol) in overdose can seriously damage the liver. It should never be taken by people who use alcohol heavily; it can result in severe liver damage and even a condition requiring a liver transplant.

Did you know?

Adult head lice are gray, about ? inch long, and often have a tiny dot on their backs. A female can lay between 50 and 150 eggs within the several weeks that she is alive. They feed on human blood.

Did you know?

In women, pharmacodynamic differences include increased sensitivity to (and increased effectiveness of) beta-blockers, opioids, selective serotonin reuptake inhibitors, and typical antipsychotics.

Chemosynthesis-based community on the East Pacific Rise. Chemosynthesis-based community on the East Pacific Rise.
Colles’ A break in the distal portion of the radius; often the result of reaching out to cushion a f Colles’ A break in the distal portion of the radius; often the result of reaching out to cushion a f
Mechanisms of pain at the nociceptor level Mechanisms of pain at the nociceptor level
Links to the World Economy Links to the World Economy
Higher-Level Thinking Skills Used in Massage Therapy Higher-Level Thinking Skills Used in Massage Therapy
Reaction 3: The Second Investment of ATP Reaction 3: The Second Investment of ATP
Video: Chemical Synapse Animation

For a complete list of videos, visit our video library