Which of the Following Explains Why Investment May Be Procyclical

question 43

Multiple Choice

Which of the following explains why investment may be procyclical?

• A) high installation costs for replacing, updating, and expanding the capital stock
• B) simultaneous investment by firms in various industries throughout the economy
• C) the correlation between current profits and investment expenditures
• D) the basing of expectations on current conditions
• E) all of the above

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