Voluntary investment occurs only if:
A) the cost of investment is zero.
B) the payoffs are known with certainty in advance.
C) the expected payoffs are greater than the costs.
D) the expected payoffs are greater than or equal to the costs.
E) the expected payoffs can be realized within one year's time.

Question

Quizplus · Accepted Answer

Voluntary investment occurs only if the expected payoffs are greater than or equal to the costs involved. This is because individuals or firms would only invest if they expect to receive a positive return on their investment, and if the expected benefits are at least equal to the costs.  The other options are not true as investment always involves some costs, the payoffs are rarely known with certainty in advance, and there is no specific time frame for realizing expected payoffs.

Voluntary Investment Occurs Only If