Consider the following statements and identify the correct ones: (A) According to the accelerator models, investment demand is proportional to the change in GNP. (B) The real rate is the nominal rate of interest plus the inflation. (C) The higher the real interest rate, the higher is the rental cost of capital. (D) Investment is a stock concept. (E) Rate of interest is a flow concept. Choose the correct answer from the options given below:
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Consumption and investment has come up 74 times in 7 exams since 2005.
This question is on Tobin's q and the user cost of capital, part of Consumption and investment in Macroeconomics.
Modern theories of investment based on the market value of capital and its rental cost.
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Question from the UGC-NET 2024 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.