Business Cycles Affect Long Run Growth Because

question 7

Multiple Choice

Business cycles affect long run growth because

• A) uncertainty caused by business cycles deters investment
• B) installation costs for new plant and equipment are lower during recessions than during periods of expansion
• C) human capital depreciates during recessions
• D) the competition to survive a recession provides incentives for firms to reorganize for greater efficiency
• E) all of the above

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