Which of the Following Situations Would Increase the Demand for Capital

question 50

Multiple Choice

Which of the following situations would increase the demand for capital?

• A)An improvement in technology increases the marginal product of capital.
• B)Capital wears out 50 percent faster than it used to.
• C)The Fed increases the interest rate.
• D)Sales are higher than anticipated, so the firm has enough cash on hand that it can afford to buy the new equipment outright.
• E)The Fed decreases the interest rate.

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