Which of the Following Is a Reason Why a Greater

question 111

Multiple Choice

Which of the following is a reason why a greater capital stock can increase investment?
I. A greater capital stock is likely to lead to more investment because further increases in the
Demand for investment tend to lower the cost of capital.
II. A greater capital stock is likely to lead to more investment since there will be more capital to replace.
III. A higher level of capital stock encourages investment in new capital because capital becomes obsolete at a faster rate.

• A) I and II only
• B) II and III only
• C) II only
• D) I, II, and III

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