Economics 9708 · AS & A Level · Economic growth

Economic growth — practice question

Which statement most accurately describes demand-induced investment?

  • AIt is spending on capital goods by firms because the rate of growth in demand for final goods and services increases.
  • BIt is spending on capital goods by firms because the cost of borrowing has fallen.
  • CIt is spending on capital goods by firms because they want to access new technology to improve the output per worker.
  • DIt is spending on new capital goods by firms replacing old and obsolete capital goods.

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