The Function Showing Total Spending on Investment Would Be Shifted

question 7

Multiple Choice

The function showing total spending on investment would be shifted inward and to the left by:

• A) a technological innovation that increases the production function parameter A.
• B) any event that raises the marginal product of capital.
• C) any event that raises the purchase price of capital.
• D) an accident that destroyed one-quarter of the U.S. capital stock while leaving the labor supply intact.

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