If the Replacement Cost of Installed Capital Equals $20 Trillion

question 84

Multiple Choice

If the replacement cost of installed capital equals $20 trillion and the market value of installed capital equals $25 trillion, then according to q theory, businesses should:

• A) add to capital stock.
• B) let capital stock shrink.
• C) keep capital stock unchanged.
• D) reduce product prices to increase profits.

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