. Investment is a determining factor of GDP. A decrease in the supply of available funds (i.e. a decrease in the supply of savings) is predicted to? a. Decrease interest rates, decrease investment towards physical capital and hence decrease GDP. b. Increase interest rates, increase investment towards physical capital and hence decrease GDP. c. Decrease interest rates, decrease investment towards physical capital and hence increase GDP. d. Increase interest rates, decrease investment towards physical capital and hence decrease GDP.
. Investment is a determining factor of GDP. A decrease in the supply of available funds (i.e. a decrease in the supply of savings) is predicted to? a. Decrease interest rates, decrease investment towards physical capital and hence decrease GDP. b. Increase interest rates, increase investment towards physical capital and hence decrease GDP. c. Decrease interest rates, decrease investment towards physical capital and hence increase GDP. d. Increase interest rates, decrease investment towards physical capital and hence decrease GDP.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. Investment is a determining factor of GDP . A decrease in the supply of available funds (i.e. a decrease in the supply of savings) is predicted to?
a. Decrease interest rates, decrease investment towards physical capital and hence decrease GDP.
b. Increase interest rates, increase investment towards physical capital and hence decrease GDP.
c. Decrease interest rates, decrease investment towards physical capital and hence increase GDP.
d. Increase interest rates, decrease investment towards physical capital and hence decrease GDP.
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