Question 6(1 point)

Which of the following statements is true?

a

Development ofnew technologiesincrease future expected returns, and thus encourage firms to invest more in new technologies, which increases AD.

b

Ifexcess capacityincreases, firms will decrease investment, which decreases AD.

c

If excess capacity decreases, firms will increase investment in order to expand operations, which increases AD.

d

All of the above.

e

Only a) and b)