Investment spending in the United States tends to be unstable because
A) expected proﬁts are highly variable.
B) capital goods are durable.
C) innovation occurs at an irregular pace.
D) all of the factors mentioned in other answers contribute to the instability.

Question

Quizplus · Accepted Answer

All of the factors mentioned in the other answers contribute to the instability of investment spending. Expected profits can vary depending on the state of the economy and consumer behavior, capital goods are durable and may not need to be replaced often, and innovation occurs at an irregular pace which can shift investment priorities. Taken together, these factors make investment spending in the United States inherently unstable.

Investment Spending in the United States Tends to Be Unstable