Which of the following is a reason why a greater capital stock can increase investment?
I. A greater capital stock is likely to lead to more investment because further increases in the demand for investment tend to lower the cost of capital.
II. A greater capital stock is likely to lead to more investment since there will be more capital to replace.
III. A higher level of capital stock encourages investment in new capital because capital becomes obsolete at a faster rate.

Question

Which of the following is a reason why a greater capital stock can increase investment? 
I. A greater capital stock is likely to lead to more investment because further increases in the demand for investment tend to lower the cost of capital.
II. A greater capital stock is likely to lead to more investment since there will be more capital to replace.
III. A higher level of capital stock encourages investment in new capital because capital becomes obsolete at a faster rate.

Quizplus · Accepted Answer

The Answer of Which of the following is a reason why a greater capital stock can increase investment? 
I. A greater capital stock is likely to lead to more investment because further increases in the demand for investment tend to lower the cost of capital.
II. A greater capital stock is likely to lead to more investment since there will be more capital to replace.
III. A higher level of capital stock encourages investment in new capital because capital becomes obsolete at a faster rate.

Which of the Following Is a Reason Why a Greater