Holding all other factors constant,a decline in the price of new capital goods will

Name: Holding all other factors constant,a decline in the price of new capital goods will
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A decline in the price of new capital goods will increase the profitability of investing in new capital goods, therefore, firms would increase their business investment. This is because the lower price of capital goods implies a higher return on investment, which will ultimately lead to an increase in the demand for capital goods.

Holding All Other Factors Constant,a Decline in the Price of New