Question 13(1 point)

Which of the following statements is true?

a

Higher acquisition, maintenance, and operating costsof capital goods lower the expected return.

b

Increased business taxes increase the expected return.

c

Technological change often involves lower costs, which would increase expected returns.

d

All of the above.

e

Only a) and c)

Question 14(1 point)

Which of the following statements is true?

a

If there is abundant idle capital on hand because of weak demand or recent investment, new investments would be less profitable.

b

If firms are planning on increasing their inventories, investment demand shifts to the right. If firms are planning to reduce their inventories, investment demand shifts left.

c

Planned inventory changes are based on expectations of either faster or slower sales: If the firm expects faster sales in the future, they will add to inventory. If the firm expects slower sales in the future, they will decrease inventories.

d

All of the above.

e

Only a) and b)

Question 15(1 point)

Which of the following statements is true?

a

Expectationsabout future economic and political conditions, both in the aggregate and in certain specific markets, can change the view of expected profits.

b

(Gross Private)Investment(Ig) is very volatile.

c

Investment is less volatile than real GDP.

d

All of the above.

e

Only a) and b)