negatively; rise; causes consumption to crowd out investment
Retained earnings are earnings that firms:
keep to pay taxes.
keep to pay dividends.
keep to finance investments.
do not pay taxes on.
If the interest rate rises:
If a firm pays for investment spending out of retained earnings:
Planned investment spending will decrease if:
The accelerator principle states that planned investment spending by firms is:
positively related to the expected growth of real GDP.
negatively related to the expected growth of real GDP.
negatively related to the current level of real GDP.
positively related to the current level of real GDP.