Question 1
What is meant by animal spirits?
A.
Gross fixed capital formation — plant, machinery, buildings. B.
Keynes: unpredictable business confidence affecting I. C.
Investment raises capital per worker. D.
Higher rates raise cost of borrowing → lower I.
Question 2
Higher interest rates tend to:
A.
Raise exports only B.
Increase investment always C.
Reduce investment D.
Shift LRAS right immediately
Question 3
What is meant by net investment?
A.
Gross investment minus depreciation. B.
Keynes: unpredictable business confidence affecting I. C.
Investment depends on expected change in demand. D.
Higher G raises interest rates and may reduce private I.
Question 4
What is meant by gross investment?
A.
Shows inverse relationship between interest rate and I. B.
Gross investment minus depreciation. C.
Total capital spending before depreciation. D.
Spending by firms on capital goods to increase productive capacity.
Question 5
What is meant by productivity link?
A.
Investment raises capital per worker. B.
Gross fixed capital formation — plant, machinery, buildings. C.
Higher G raises interest rates and may reduce private I. D.
Shows inverse relationship between interest rate and I.
Question 6
Investment in AD refers to:
A.
Exports only B.
Firm spending on capital goods C.
Household food spending D.
Government transfer payments
Question 7
What is meant by investment demand curve?
A.
Shows inverse relationship between interest rate and I. B.
Total capital spending before depreciation. C.
Investment raises capital per worker. D.
Higher G raises interest rates and may reduce private I.
Question 8
What is meant by investment (i)?
A.
Spending by firms on capital goods to increase productive capacity. B.
Gross investment minus depreciation. C.
Investment depends on expected change in demand. D.
Gross fixed capital formation — plant, machinery, buildings.
Question 9
Animal spirits describe:
A.
Import quotas B.
Government tax law C.
CPI measurement D.
Unpredictable business confidence
Question 10
Net investment equals:
A.
GDP per capita B.
C + I + G C.
Gross investment minus depreciation D.
Exports minus imports
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