If Net Investment Is Positive, Then

question 55

Multiple Choice

If net investment is positive, then:

• A)the rate of interest (and the capital market)could still be in long-run equilibrium.
• B)it is impossible to say whether the capital stock is growing, unless gross investment is also known.
• C)the capital stock is increasing, which might cause the interest rate to fall in the long run if the greater capital is applied to fixed amounts of other factors.
• D)the capital stock is increasing, causing the demand curve for capital to shift downward in the long run and the interest rate to fall.
• E)this could be a long-run equilibrium position, provided net saving is zero.

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