Multiple Choice
Which of the following illustrates how the investment accelerator works?
A) An increase in government expenditures increases aggregate spending so that SnoozeBargain Co.decides to modernize its motels.
B) An increase in government expenditures increases the interest rate so that SnoozeBargain Co.decides to modernize its motels.
C) An increase in government expenditures increases the interest rate so that the demand for stocks and bonds issued by SnoozeBargain Co.rises.
D) An increase in government expenditures decreases the interest rate so that SnoozeBargain Co.decides to modernize its motels.
Correct Answer:
Verified
Correct Answer:
Verified
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