An increase in the interest rate
A) reduces planned investment but increases unplanned investment by increasing inventories.
B) reduces planned investment as well as unexplained investment by reducing inventories.
C) has no impact on planned investment because it is autonomous.
D) changes inventories in a way that cannot be predicted.
Correct Answer:
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Q29: In the Keynesian model,changes in aggregate supply
A)are
Q30: Both Keynesians and supply-siders believe that tax
Q31: When firms incur unplanned inventories,they typically
A)build new
Q32: Keynes believed that the instability in income
Q33: In the simple Keynesian model,total savings equals
A)total
Q35: According to Keynes,the level of consumer expenditures
Q36: Total planned expenditure is composed as
A)planned investment.
B)planned
Q37: The most important determinant of any multiplier
Q38: An increase in taxes
A)reduces income by more
Q39: The marginal propensity to consume is
A)the change
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