Which of the following is a determinant of firms' investment and employment decisions?

Question

Quizplus · Accepted Answer

All three factors listed - expectations of future economic conditions, cost of capital, and interest rates - can influence firms' investment and employment decisions. Expectations of future economic conditions can affect a firm's outlook on future demand for its products and services, which in turn can influence decisions on capital expenditures and hiring. The cost of capital - the expenses associated with obtaining financing to support investment - can determine the feasibility of potential investments, while interest rates can affect borrowing costs and the attractiveness of investing in different assets.

Which of the Following Is a Determinant of Firms' Investment