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6) Which of the following is an example of an investment? 1) A firm builds a new

ID: 1105893 • Letter: 6

Question

6) Which of the following is an example of an investment? 1) A firm builds a new plant 2) A student attends college 3) The government builds a dam to have a source of hydroelectric power 4) all of the above 5) none of the above 7) The payoffs resulting from new investment 1) occur in the future and are known with certainty 2) occur in the present and are known with certainty occur in the future but are not k 4) depend only on current profit:s 5) none of the above 8) Compared to consumption, investment is a much component of GDP and is much more 1) larger, stable 2) smaller, stable 3) larger, volatile 4) smaller, volatile 5) none of the above 9) Optimistic investors tend to their investment spending. 1) reduce 2) increase 3) defer 4) not change 5) none of the above 10) Foreign investment 1) decreases the amount of capital available and increases local interest rates 2) is a tool of imperialism and colonialism 3) can be beneficial to an economy, by increasing the amount of capital available 4) all of the above 5) none of the above

Explanation / Answer

Only 4 subparts are answered as per answering policies

6. All of the above, as investment refers to the effors taken to achieve the expected outcome in the form of higher income. All the three options are efforts by the entities to obtain higher income.

7. Answer 3, Payoffs occur in the future but are not known with certainity. as the future payoffs can be predicted with various analysis but the predictions may not turn positive in all future events leading to uncertainity.

8. answer 4, investment represents less than 1/5 th of the GDP but is much volatile than the other components.

9. Answer 2, optimistic investors increase their investments with the positive outlook on industry.

10. Answer 3, it is beneficial to the economy as the foreign investments increase the availability of capital in the domestic economy.

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