According to the neoclassical theory of business fixed investment, which of the following is true?
A) investment spending is governed by the discrepancy between desired and actual interest rates
B) the desired capital stock decreases with a decrease in the rental cost of capital
C) monetary and fiscal policy changes affect investment spending but often with long lags
D) the desired capital stock decreases with an increase in the expected level of output
E) none of the above
Correct Answer:
Verified
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