Holding constant the expected rate of return on all possible investment opportunities in the economy, a(n)
Holding constant the expected rate of return on all possible investment opportunities in the economy, a(n)
A decrease in the real rate of interest will tend to decrease the level of investment.
B increase in the real rate of interest will tend to increase the level of investment.
C change in the real interest rate will have no impact on the level of investment.
D decrease in the real rate of interest will tend to increase the level of investment
Homework Answers
Option D
Explanation: When interest rate goes lower, it becomes more profitable to invest more.
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Holding constant the expected rate of return on all possible investment opportunities in the economy, a(n)
Please do all Thank you 7. Given the expected rate of return on all possible investment...
Please do all
Thank you
7. Given the expected rate of return on all possible investment opportunities in the economy, a(n) B. decrease in the real rate of interest will tend to increase the level of investment. C. decrea A. increase in the real rate of interest will tend to increase the level of investment. se in the real rate of interest will tend to decrease the level of investment. D. change in the real interest rate will have no...
39. In a small open economy, if the world interest rate falls, then domestic investment will _and the real exchange...
39. In a small open economy, if the world interest rate falls, then domestic investment will _and the real exchange rate will holding all else constant. A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
wich of the following are short term financial 32) Holding the expected return on bonds constant,...
wich of the following are short term financial
32) Holding the expected return on bonds constant, an increase in the expected return on com- mon stocks would the demand for bonds, shifting the demand curve to the A) decrease; left B) decrease; right C) increase; left D) increase; right 33) Everything else held constant, when stock prices become less volatile, the demand curve for bonds shifts to the and the interest rate A) right; rises B) right; falls C) left;...
Assume there are no investment projects in the economy that yield an expected rate of return...
Assume there are no investment projects in the economy that
yield an expected rate of return of 25 percent or more. But suppose
there are $10 billion of investment projects yielding expected
returns of at least 20 percent; another $10 billion yielding at
least 15 percent; another $10 billion yielding at least 10 percent;
and so forth.
a. Draw this relationship between the expected rate of return and the amount of investment expenditure. Instructions: Use the tool provided 'ID' to...
Assume there are no investment projects in the economy that yield an expected rate of return...
Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns of at least 20 percent; another $10 billion yielding at least 15 percent; another $10 billion yielding at least 10 percent, and so forth a. Draw this relationship between the expected rate of return and the amount of investment expenditure Instructions: Use the tool provided 'ID' to...
22. In a small open economy, if the world interest rate increases, then the supply of domestic currency on the forei...
22. In a small open economy, if the world interest rate increases, then the supply of domestic currency on the foreign exchange market will and the real exchange rate will holding all else constant. A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
Assume there are no investment projects that will produce an expected rate of return of 8...
Assume there are no investment projects that will produce an expected rate of return of 8 percent or more. There are, however, $2 billion worth of investment projects with an expected rate of return at 7 percent, an additional $2 billion for every drop of the interest rate by 1 percent. If the real interest rate is 3 percent in this economy, the cumulative amount of investment at the 3 percent or higher rate of return is: A. $10 billion...
Holding other factors constant, if the income tax is replaced with a consumption tax so that...
Holding other factors constant, if the income tax is replaced with a consumption tax so that saving is not taxed, then the real interest rate will ______ and the equilibrium quantity of saving and investment will _______. decrease; increase increase; decrease increase; not change increase; increase
The following graphs outline the economy of the United States. The general price level is constant.
The following graphs outline the economy of the United States. The general price level is constant. a) In the following graph plot the new MS line that corresponds to a decrease in the money supply that would increase the interest rate from 5% to 7% b) Plot the new equilibrium point on the la line that shows the effect of the higher 7% interest rate on the level of investment spending c) With the new interest rate what is the new level of...
Please help me with 15.7-15.8 15-7 Holding all else constant, what effect would the following have...
Please help me with 15.7-15.8
15-7 Holding all else constant, what effect would the following have on a company's P/E ratio? (highlight answer, delete others) (COME BACK) a. An increase in expected growth rate of earnings. Up Down No change b. A decrease in expected dividend payout ratio. Up Down No change c. An increase in the risk-free rate of return. Up Down No change d. An increase in the risk premium. Up Down No change e. A decrease in...
Please do all
Thank you
7. Given the expected rate of return on all possible investment opportunities in the economy, a(n) B. decrease in the real rate of interest will tend to increase the level of investment. C. decrea A. increase in the real rate of interest will tend to increase the level of investment. se in the real rate of interest will tend to decrease the level of investment. D. change in the real interest rate will have no...
39. In a small open economy, if the world interest rate falls, then domestic investment will _and the real exchange rate will holding all else constant. A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
wich of the following are short term financial
32) Holding the expected return on bonds constant, an increase in the expected return on com- mon stocks would the demand for bonds, shifting the demand curve to the A) decrease; left B) decrease; right C) increase; left D) increase; right 33) Everything else held constant, when stock prices become less volatile, the demand curve for bonds shifts to the and the interest rate A) right; rises B) right; falls C) left;...
Assume there are no investment projects in the economy that
yield an expected rate of return of 25 percent or more. But suppose
there are $10 billion of investment projects yielding expected
returns of at least 20 percent; another $10 billion yielding at
least 15 percent; another $10 billion yielding at least 10 percent;
and so forth.
a. Draw this relationship between the expected rate of return and the amount of investment expenditure. Instructions: Use the tool provided 'ID' to...
Assume there are no investment projects in the economy that yield an expected rate of return of 25 percent or more. But suppose there are $10 billion of investment projects yielding expected returns of at least 20 percent; another $10 billion yielding at least 15 percent; another $10 billion yielding at least 10 percent, and so forth a. Draw this relationship between the expected rate of return and the amount of investment expenditure Instructions: Use the tool provided 'ID' to...
22. In a small open economy, if the world interest rate increases, then the supply of domestic currency on the foreign exchange market will and the real exchange rate will holding all else constant. A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
Please help me with 15.7-15.8
15-7 Holding all else constant, what effect would the following have on a company's P/E ratio? (highlight answer, delete others) (COME BACK) a. An increase in expected growth rate of earnings. Up Down No change b. A decrease in expected dividend payout ratio. Up Down No change c. An increase in the risk-free rate of return. Up Down No change d. An increase in the risk premium. Up Down No change e. A decrease in...
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