4.1.2 - Investment
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Practice Questions
Test your understanding with targeted questions
Define ex ante investment.
💡 Hint: Think about what producers plan ahead.
What does the term 'investment' refer to?
💡 Hint: Consider both physical assets and stock changes.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is ex ante investment?
💡 Hint: Think about producer intentions.
True or False: Physical capital includes raw materials.
💡 Hint: Consider what constitutes 'capital'.
1 more question available
Challenge Problems
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In a hypothetical economy, if the market interest rate falls, explain how this would impact the investment behavior of firms and the ensuing effects on aggregate demand.
💡 Hint: Think about the relationship between costs and business decisions.
Given an investment multiplier of 5 and an increase in autonomous investment of 200, calculate the total change in aggregate demand.
💡 Hint: Use the multiplier to see how initial spending affects overall demand.
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