Question

Question 32 (1 point)

Which of the following statements is true?

a	Development of new technologies increase future expected returns, and thus encourage firms to invest more in new technologies, which increases AD.
b	If excess capacity increases, firms will decrease investment, which decreases AD.
c	If excess capacity decreases, firms will increase investment in order to expand operations, which increases AD.
d	All of the above.
e	Only a) and b)

Question 33 (1 point)

Which of the following statements is true?

a	Higher business taxes increase costs for businesses and reduce short-run AS.
b	Business subsidies lower production costs and increase short-run AS.
c	It is costless for businesses to comply with government regulation.
d	All of the above.
e	Only a) and b)

Question 34 (1 point)

Which of the following statements is true?

a	Increases in investment increase AD; and decreases in investment reduce AD.
b	As the real interest rate increases, the cost of borrowing increases and thus less funds will be borrowed; this reduces investment and then AD. On the other hand, a decrease in the real interest rate increases borrowing; this increases investment and then AD.
c	If firms are optimistic about future expected returns, they will invest more now, which increases AD. On the other hand, if firms are pessimistic about future expected returns, they will invest less now, which reduces AD.
d	All of the above.
e	Only a) and b)

Answer 1