The following factors help explain the instability of investment, except:
A) Business expectations can quickly change for unpredictable reasons
B) Innovations in the economy occur quite irregularly
C) Profits of firms are highly variable from one period to the next
D) Purchases of capital goods are usually nondiscretionary and cannot be postponed

Question

Quizplus · Accepted Answer

This statement is not true as the purchases of capital goods can be postponed or delayed in response to changes in business expectations or economy. Therefore, D does not help explain the instability of investment. A, B, and C are valid factors that contribute to the instability of investment.

The Following Factors Help Explain the Instability of Investment, Except