Firms decide how much to invest by comparing the rate of return on their projects with:

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Done Chapter 8 Part 2: Homework Problems 6. Firms decide how much to invest by comparing the rate of return on their projects
Done Chapter 8 Part 2: Homework Problems 10. If the marginal propensity to consume (MPC) rises, the multiplier: rises or fall
Done Chapter 8 Part 2: Homework Problems 14. (Table) The table shows data on consumption at various levels of income. The val
Done Chapter 8 Part 2: Homework Problems 17. From year to year, consumption fluctuates more than gross private domestic inves

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Answer

6. Option 3. The interest rate

Explanation: The interest rate is the cost of
the funds invested by the firms.

10. Option 3. Also rises

Explanation: Multiplier = 1/(1-MPC). So, when
MPC rises, the denominator falls and the multiplier rises.

14. Option 4. 0.9

Explanation:

Here, when income rises by 500, spending rises by 450.

Marginal propensity to consume = change in spending/change in
income = 450/500 = 0.9.

17. False

Explanation: Consumption fluctuates less than
investment.

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