Suppose That the Value of the Capital Stock in the Economy

question 121

Multiple Choice

Suppose that the value of the capital stock in the economy is $150 million.If investment is equal to zero,then

• A) output will remain at its current level.
• B) the capital stock will decline in value but output will remain the same.
• C) the capital stock will decline in value and output will move down along the production function to a new lower level of output.
• D) the capital stock will decline in value and the production function will shift down as output falls.
• E) firms will hire more labor to compensate for the lack of investment and output will remain the same.

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Definitions:

Financial Planning

The process of estimating the capital required and determining its competition; it's the process of framing financial policies in relation to procurement, investment, and administration of funds of an enterprise.

Operations And Logistics

The management of the processes involved in producing and distributing goods and services.

EOQ

Economic Order Quantity, a formula used in operations management to determine the optimal order size that minimizes the total inventory holding costs and ordering costs.

Push Inventory

A strategy where products are produced or supplied based on projected demand rather than actual customer orders.