Investment spending
A) tends to be volatile.
B) is the largest component of total spending.
C) is not sensitive to interest rates.
D) is limited to the stock and bond markets.

Question

Quizplus · Accepted Answer

Investment spending tends to be volatile because it is impacted by a variety of factors, such as changes in interest rates, economic conditions, and political events. This can lead to large fluctuations in the amount of investment spending within a given time period. While investment spending is important, it is not typically the largest component of total spending. It also includes a variety of types of investments beyond just stocks and bonds, such as real estate and commodities. Interest rates can have a significant impact on investment spending, as higher rates can increase the cost of borrowing for businesses and decrease their willingness to invest.

Investment Spending