Due to a negative shock in the external sector, the demand forecast has become more pessimistic. How does this influence the marginal efficiency of capital (MEC)?
Tap an option to check your answer.
1 mark, −0.33MacroeconomicsConsumption and investmentMarginal efficiency of capital and the acceleratorEasyabout 1 min
UoH 2021 Question 62: Consumption and investment
Answer and worked solution
Checking your account…
Consumption and investment has come up 74 times in 7 exams since 2005.
What this question tests
This question is on Marginal efficiency of capital and the accelerator, part of Consumption and investment in Macroeconomics.
How expected returns, interest rates and output growth drive investment.
TestStop has 17 past-paper questions on this subtopic.
Similar questions from other papers
- The permanent income hypothesis was propounded by:
- In an economy, which one of the following relates private investment to the stock market?
- Which one of the following statements is CORRECT in the context of the Keynesian Absolute Income Hypothesis?
- Match List - I with List - II: List-I: A. Life Cycle Hypothesis; B. Drift Theory; C. Ratchet Effect; D. Permanent Income Hypothesis List-II: I. Milton Friedman; II.…
- Which of the following is not correct about residential investment?
Question from the UoH 2021 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.