The Decision Rule for Making an Investment Is to Do $\Delta$

question 134

Multiple Choice

The decision rule for making an investment is to do so as long as:

• A) the marginal product of capital is positive (\(\Delta\)Q/\(\Delta\)K > 0).
• B) the marginal product of labor is positive (\(\Delta\)Q/\(\Delta\)L > 0).
• C) the marginal product of capital is greater or equal to the world real interest rate (\(\Delta\)Q/\(\Delta\)K \(\ge\) r*).
• D) the initial level of wealth is equal to zero.

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