If investment is less than depreciation, then the capital stock:
A) decreases.
B) remains constant.
C) increases.
D) changes indeterminately.
Answer: A) decreases.
You might also like to view...
Which of the following is closest to the economist’s definition of perfect competition?
A. The airline industry B. The soft drink industry C. The fishing industry D. Cellular telephone service
The adjustment of nominal incomes to changes in the price level (CPI) is fixed because of the: a. volatility of investment spending
b. existence of long-term contracts. c. complete information possessed by workers. d. all of the above.
If minimum efficient scale is small relative to the maximum potential market,
a. relatively large firms will have a cost advantage over relatively small firms b. the market price will be low c. relatively small firms will have a cost advantage over relatively large firms d. the market price will be high e. only one firm will survive in the long run.
A point lying inside (under) a production possibilities curve indicates that
a. the economy is saving money. b. there are no associated opportunity costs. c. more output could be produced with existing resources. d. technology limits production.