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:

Complaining

The expression of dissatisfaction or annoyance about something.

Blinking

A rapid closing and opening of the eyelid, which is an involuntary reflex to protect the eye from irritants and distribute tear fluid.

Respondent Behavior

Actions that occur as an automatic response to some stimulus, typically conditioned through learning processes.

Stimulus

Any event or situation that evokes a response.