If companies increase their level of investment,a short-run increase in output will be followed by a reduction,resulting in an overall decrease in output.

Question

Quizplus · Accepted Answer

This statement is incorrect. If companies increase their level of investment, it is more likely to result in long-term gains in output and productivity, rather than a short-run increase followed by a reduction. Increased investment can lead to modernization and expansion of production capabilities, allowing for sustained gains in output over time.

If Companies Increase Their Level of Investment,a Short-Run Increase in Output