31) What would happen to the planned investment function if business taxes were increased?
A) It would shift to the right.
B) It would shift to the left.
C) It would shift upward.
D) There would be no change.
32) Which would increase real planned investment demand?
A) a decrease in new technologies available
B) a decline in profit expectations
C) a decrease in business taxes
D) an increase in nominal interest rates
33) A decrease in interest rates will
A) shift the investment function relating planned investment to the interest rate to the right.
B) shift the investment function relating planned investment to the interest rate to the left.
C) be a movement along the investment function relating planned investment to the interest rate.
D) have no impact on the investment function relating planned investment to the interest rate.
34) All of the following would cause the investment function relating investment to the interest rate to shift EXCEPT
A) a change in the real interest rate.
B) a change in producer expectations of future profit.
C) a change in planned capital goods expenditure.
D) a change in productive technology.
35) If businesses expect the economic activity to expand
A) the planned investment function relating investment to the interest rate will shift to the left.
B) the planned investment function relating investment to the interest rate will remain unchanged, but will move downward along the curve.
C) the planned investment function relating investment to the interest rate will steepen.
D) the planned investment function relating investment to the interest rate will shift to the right.
36) Real planned investment spending is inversely related to
A) real disposable income.
B) wealth.
C) the interest rate.
D) producer expectations of future profit.
37) The relationship between planned real investment spending and the interest rate is
A) inverse.
B) direct.
C) constant.
D) highly volatile.
38) If we observe that interest rates rise but real investment spending still increases, what must have happened to the function relating investment to the interest rate?
A) It shifted to the right.
B) It shifted to the left.
C) There was a movement up the function relating investment to the interest rate.
D) There was a movement down the function relating investment to the interest rate.
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