Which of the Following Will Shift a Firm's Investment Demand

question 119

Multiple Choice

Which of the following will shift a firm's investment demand curve to the left?

• A) There is an excess demand in the market for skilled labor.
• B) The tax code is revised to allow firms to accelerate depreciation on their capital assets.
• C) The firm experiences a decrease in the capacity utilization rate of capital.
• D) Its current capital stock is way below its desired level.

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Definitions:

Merchandise

Goods that are purchased for the purpose of being sold to customers in the retail or wholesale market.

Periodic Inventory System

An inventory system that updates the inventory balance at specific intervals, necessitating physical counts.

Cost of Merchandise

The total purchase cost of goods that a retailer, wholesaler, or distributor has bought for the purpose of reselling.

Freight In

The cost associated with transporting goods from the supplier to the buyer, typically recorded as part of the inventory cost.