To Determine the Change in the Capital Stock, the Level

question 12

Multiple Choice

To determine the change in the capital stock, the level of new investment must be adjusted for depreciation because some new investment

• A) is not used immediately.
• B) merely replaces existing, but worn out, capital.
• C) replaces existing workers.
• D) is more efficient than existing capital.

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Definitions:

Marketable Securities

Liquid financial instruments that can be quickly converted into cash at a reasonable price.

Companies

Entities engaged in commercial, industrial, or professional activities with the goal of generating profits.

Line of Credit

A flexible loan from a bank or financial institution that allows a borrower to draw funds up to a specified limit at any time, with interest typically charged only on the amount drawn.

Specific Length

A term that might refer to the fixed duration or measure of something, but without more context, its application is too broad to define precisely here.