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Which of the Following Explains Why Investment May Be Procyclical

Question 43

Multiple Choice

Which of the following explains why investment may be procyclical?


A) high installation costs for replacing, updating, and expanding the capital stock
B) simultaneous investment by firms in various industries throughout the economy
C) the correlation between current profits and investment expenditures
D) the basing of expectations on current conditions
E) all of the above

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