Question

1. Which of the following is not an influence on business investment spending? a. Business expectations....

1. Which of the following is not an influence on business investment spending?
a. Business expectations.
b. Technology and innovation.
c. Household wealth.
d. Interest rates
2. Macro failure is defined as
a. When the market fails to produce goods and services.
b. When aggregate supply does not intersect aggregate demand.
c. When equilibrium real GDP is not equal to full-employment GDP .
d. When aggregate demand equals aggregate supply.
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Answer #1

1.Ans:- c) Household wealth

As investment spending refers to the purchase of required machineries for the production system, land to set up a plant, infrasructure etc which helps to stimulate the production system and profits of a business. Investment spending is mainly done to gain long term profits by incurring investment costs on infrastructure which elevates the production process and that is why household wealth is not considered as investment spending.

2.Ans:- C) When equilibrium real GDP is not equal to full employment GDP

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