Question 1 2 pts During recessions disproportionately to investment falls; consumption consumption rises; income O taxes rise; income O output falls; income O consumption falls, government expenditures Question 2 2 pts One reason we are interested in investment is its: negative impact on current consumption link to long-term economic growth

Question 1 2 pts During recessions disproportionately to investment falls; consumption consumption rises; income O taxes rise; income O output falls; income O consumption falls, government expenditures Question 2 2 pts One reason we are interested in investment is its: negative impact on current consumption link to long-term economic growth. relationship to exchange rate markets. contribution to higher interest rates. O impact on financial markets.

Question 3 2 pts We can use the arbitrage equation: O for maximizing profits. O to analyze investment in capital, financial assets, and human capital. O for understanding fluctuations in precautionary saving. O to improve our understanding of the quantity theory of money. O to forecast government spending. Question 4 2 pts If Ris the real interest rate, w is the real wage, MPK is the marginal product of capital, and MPL is the marginal product of labor, which of the following conditions informs the profit-maximizing firm how much capital to invest? OR-W O MPK MPLIF RW O MPKMPL OR MPK OR=0 and MPK - MPL