QUESTION 6 Which of the following is graphed as a horizontal line across levels

Question

QUESTION 6 Which of the following is graphed as a horizontal line across levels of real GDP? O The saving schedule O The investment schedule O The consumption schedule O The investment demand curve QUESTION 8 The aggregate demand curve is: o vertical under conditions of full employment O horizontal when there is considerable unemployment in the economy. O downsloping because of the interest-rato, real-balances, and foreign purchases effects. O downsloping because production costs decrease as real output rises QUESTION 7 If the real interest rate falls, then the O Investment schedule will shift upward O Investment schedule will shift downward O Point moves along the investment schedule to the right O Consumption schedule will shift downward

Explanation / Answer

6.

Investment schedule shows the relationship between investment and national income or real GDP.

Since usually investment remains same at all level of real GDP, therefore the curve of investment schedule is a horizontal line.

Hence option second is the correct answer.

Option second is; investment schedule.

7.

Since there is an inverse relationship between real interest rate and investment. Therefore if real interest rate falls, then there will be rightward movement along the investment schedule.

Hence option third is the correct answer.

Option third is; point moves along the investment schedule to the right.

8.

The aggregate demand curve is a downward sloping because of the interest rate, real balances and foreign purchases effects.

Hence option third is the correct answer.

option third is ; downward sloping because of the interest rate, real balances and foreign purchases effects.

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