The intercept term of the linear investment function measures:

Question

Quizplus · Accepted Answer

The intercept term of the linear investment function represents the autonomous or spontaneous investment expenditures that occur regardless of the level of income. Therefore, the correct answer is autonomous investment expenditures (B). Induced investment expenditures refer to those that vary with changes in income, and income itself is not directly measured by the intercept term.

The Intercept Term of the Linear Investment Function Measures