Which of the Following Situations Would Increase the Demand for Capital

question 50

Multiple Choice

Which of the following situations would increase the demand for capital?

• A)An improvement in technology increases the marginal product of capital.
• B)Capital wears out 50 percent faster than it used to.
• C)The Fed increases the interest rate.
• D)Sales are higher than anticipated, so the firm has enough cash on hand that it can afford to buy the new equipment outright.
• E)The Fed decreases the interest rate.

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Definitions:

Jiffy Lube

An American brand of automotive oil change specialty shops that also offer a variety of maintenance services.

Buyer Requirement

The specific conditions or criteria that purchasers or markets demand from products or services.

Engine Oil

A lubricant used in internal combustion engines to reduce wear on moving parts, clean the engine from sludge, and cool the engine by carrying heat away from moving parts.

Filters

Tools or processes used to remove or separate unwanted parts from a signal or data.