For the Purposes of Integrating Forward-Looking Business Investment Decisions into a Model

question 1

Multiple Choice

For the purposes of integrating forward-looking business investment decisions into a model of macroeconomic behavior, capital employment decisions proceed along at least two dimensions. The most important of these considerations are

• A) how much capital stock to maintain and how much to depreciate.
• B) how much capital stock to maintain and how quickly to achieve that stock by a flow of investment expenditure.
• C) how much capital to rent and how much to purchase.
• D) how much of the capital that is rented should be depreciated and how much should be sent back.
• E) how fast to expand the capital stock of a growing division and how fast to contract the capital stock of a failing division.

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Definitions:

Collateral Agreement

An agreement that has its own consideration, but supports another agreement.

Breach of the Contract

An occurrence when one or more parties involved in a contract fail to fulfill their legal obligations as stipulated within the contract.

Financing

The process of providing funds for business activities, making purchases, or investing.

Agreements of Purchase

Legal documents formalizing the terms and conditions under which goods, services, or property are bought and sold.