Which of the Following Is a Reason Why a Greater

question 87

Multiple Choice

Which of the following is a reason why a greater capital stock can reduce investment?

• A) A greater capital stock is likely to lead to less investment because further increases in the demand for investment tend to raise the cost of capital.
• B) Since businesses undertake investment to adjust their stock of capital to its desired level, the amount of investment needed to reach the desired level will be lower when the current capital stock is higher.
• C) A greater capital stock is likely to lead to less investment since there will be less old capital to replace.
• D) The rate of new technological innovations tends to deter investment in new capital because capital becomes obsolete at a faster rate.

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Definitions:

Visual Images

Mental representations of physical objects or scenes that are not currently being observed, often utilized in cognitive processes such as memory and imagination.

Visual Perception

The ability to interpret and make sense of visual stimuli from the environment through the process of sight.

Spatial Arrangement

The organization and placement of objects in space, often requiring an understanding of structure and the relationships between items.

Principle Of Equivalence

The concept in decision theory that choices should be consistent when presented in different forms but representing the same problem.