The Notion of Permanent Output Is Important for Investment Since

question 11

Multiple Choice

The notion of permanent output is important for investment since

• A)the demand for capital depends on a normal or permanent level of output
• B)firms always try to keep their level of investment spending fairly constant
• C)firms expect current output to always be equal to permanent output
• D)the difference between permanent output and current output is equal to inventory accumulation
• E)current consumption depends on permanent income, and more consumption always leads to more investment

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