Recall the Application About Energy Price Uncertainty and Its Impact

Multiple Choice

Recall the Application about energy price uncertainty and its impact on investment spending and GDP growth to answer the following question(s) . Increases in oil prices can lead to a drop in GDP. However, uncertainty about oil prices is also an important factor. The volatility of oil prices creates uncertainty for firms making investment decisions, and adversely affects GDP growth.
-According to this Application, if the volatility of energy prices led to expectations of declining real GDP, investment spending at that time would tend to decrease. This relationship between the decrease in investment spending and the expected decline in real GDP would be expressed by the

A) liquidity principle.
B) accelerator theory.
C) present value theory.
D) real-nominal principle.