In an economy that has stationary production capacity:

Question

Quizplus · Accepted Answer

In an economy with stationary production capacity, there is no increase or decrease in the production capacity, therefore, there is no net investment in the economy. However, there may be some capital consumption, meaning new capital is needed to replace worn-out or obsolete capital. Therefore, we cannot choose option A, B, or D. The correct choice is C, as net investment is zero in such an economy.

In an Economy That Has Stationary Production Capacity