Q1 Financial theory of investment argues that profits depend ____________on national income and____________ on capital
Positively and negativ ely
Q2 How many propositions did duesenberry used as the basis of the theory?
Q3 The financial theory of investment integrates profits theory and acceleration theory and emphasizes that the_________ is the main determinant of investment
Disaggregated cash plan
Q4 According to the profit theory of investment where profits vary directly with income for any level of profits, the higher the interest rate, the_____________will be the_____________and vice versa.
Smaller and optimal capital stock
Q5 When retained earnings are of great importance to small and large firms
When capital market is perfect
Q6 Undistributed profits are regarded as source of internal funds for financing investment, the theory of profit posts that if total income and total profit are high ?????.of firm also??
Distributed pro fit and high
Q7 The flexible accelerator theory imtroduces —————in the adjustment process
Q8 The accelerator principle states that an increase in the rate of output of a firm will require a?? ??in its capital state
Q9 The MEI schedule which has a negative slow indicating the amount of investment demanded of various rate of interest is called???????..
Investment demand schedule or curv e
Q10 The marginal efficiency of capital (MEC) is the ????.from an additional unit of capital asset over it cost
Q11 Investment will be made in new capital only when the ??????..is higher than interest rate
Expected rate of return
Q12 What two major factors determine planned investment
Anticipated rate of return and real interest rate
Q13 Autonomous investment is argued to be income in elastic and therefore????? ??.income
Q14 The marginal propensity to invest is the ratio of change in income denoted mathematically as?
Q15 Real investment may be induced investment when it is ???????.or? ?????..motivated
Profit or incom e
Q16 Keynes who did not automatically tend towards full employment believed that the resulting under employment could be curved by _____ or ______prices.
Fixed or monetary
Q17 Posthechnological change is a force that can shift MEI to???????? ?.
Right onl y
Q18 Investment is the production or acquisition of real capital assets during any period and is inversely related to interest rate and low interest will lead to high investment, vice versa known as___
Marginal efficiency of investment (M EI)
Q19 Capital is regarded as any previously produced input that can be used in
Q20 What is financial investment and real investment?
Addition to capital equipment and buying of shares