Which factor explains the variability of investment?
A) The regularity of innovation
B) The durability of capital goods
C) The constancy of expectations
D) The constancy of profits

Question

Quizplus · Accepted Answer

The variability of investment is primarily explained by the durability of capital goods. When capital goods are durable, they can be used for a longer period, and firms do not need to invest in new equipment or machinery as frequently. This results in fluctuations in investment levels over time. Factors such as the regularity of innovation, constancy of expectations, and constancy of profits can also have an impact on investment, but they are not the primary drivers of variability in investment.

Which Factor Explains the Variability of Investment