Q.

According to Hayek’s overinvestment theory of trade cycle, fluctuation of investment occurs when

A. Natural rate of interest is not equal to market rate of interest
B. Natural rate of interest is equal to market rate of interest
C. Natural rate of interest is equal to the rate of inflation
D. None of the above
Answer» A. Natural rate of interest is not equal to market rate of interest
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Macroeconomics 2

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