Investment spending will decrease when A business cash flow decreases B firms

Investment spending will decrease when a business

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139) Investment spending will decrease whenA) business cash flow decreases.B) firms become more optimistic about earning future profits.C) the interest rate falls.D) the corporate income tax decreases.Answer: A139)Page Ref: 782-783/400-401Learning Outcome: Macro-8: Investigate the relationship between income and expenditures.140) During a(n) ________ many firms experience reduced profits, which reduces ________ andinvestment spending.140)Page Ref: 783/401Learning Outcome: Macro-8: Investigate the relationship between income and expenditures.141) If the marginal propensity to save is 0.4, then a $2 million increase in disposable income will141)Page Ref: 780/398Learning Outcome: Macro-8: Investigate the relationship between income and expenditures.142) The difference between GDP and disposable income is142)Page Ref: 779/397Learning Outcome: Macro-8: Investigate the relationship between income and expenditures.26
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143) U.S. net export spending falls whenA) the inflation rate is lower in the United States relative to other countries.B) the growth rate of U.S. GDP is faster than the growth rate of GDP in other countries.C) the price level in the United States falls relative to the price level in other countries.D) the value of the U.S. dollar decreases relative to other currencies.Answer: B143)Page Ref: 787/405Learning Outcome: Macro-8: Investigate the relationship between income and expenditures.144) Net exports usually ________ when the U.S. economy is in a recession and ________ when theU.S. economy is expanding.144)Page Ref: 787/405Learning Outcome: Macro-8: Investigate the relationship between income and expenditures.
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