Page 95 - Macroeconomics. book docx_Neat

Answer: D

Q6. When the interest rate increases, investment usually:

A. Increases

B. Remains constant

C. Becomes zero

D. Decreases

Answer: D

Q7. Investment is included in national income using which approach?

A. Expenditure approach
B. Income approach

C. Output approach

D. Saving approach

Answer: A

Q8. The accelerator principle explains the relationship between investment and:

A. Changes in income
B. Interest rates

C. Inflation

D. Taxes

Answer: A

Q9. If income increases, according to the accelerator principle, investment will:

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