Which of the Following Statements of the Expected Flow of Future

question 189

Multiple Choice

Which of the following statements of the expected flow of future benefits is false?

• A) Firms must rely on forecasts of expected future benefits to make sensible investment decisions.
• B) Households, business firms, and governments all evaluate the expected flow of benefits when making investment decisions.
• C) If future benefits are overestimated by the firm, the firm will under invest in capital.
• D) If future benefits are underestimated by the firm, the firm will under invest in capital.

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Definitions:

Productivity

The measure of efficiency of production of goods or services, often quantified as output per unit of input.

Coordinating

The process of organizing activities, tasks, or groups to ensure efficient functioning and achieve specific goals.

Identifying

The process of recognizing or establishing something as being a particular thing.

Replication

The process of duplicating or reproducing a study, experiment, or procedure to verify its results.