5. How does investment as defined by economists differ from investment as defined by the general public? What would happen to economic investment made today if firms expect the future returns to such investment to be very low? What would happen to the amount of economic investment today if firms expect future returns to be very high? LO6.3 the amount of

5. How does investment as defined by economists differ from investment as defined by the general public? What would happen to economic investment made today if firms expect the future returns to such investment to be very low? What would happen to the amount of economic investment today if firms expect future returns to be very high? LO6.3 the amount of

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.

Question

Help me with #5 please

5. How does investment as defined by
economists differ from investment as
defined by the general public? What
would happen to
economic investment made today if
firms expect the future returns to such
investment to be very low? What would
happen to the amount of economic
investment today if firms expect future
returns to be very high? LO6.3
the amount of

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