e demand for investment goods will increase along the optimal investment schedule. e optimal investment schedule shifts to the right. For each level of investment, the future marginal product of ca e demand for investment goods will decrease along the optimal investment schedule.

e demand for investment goods will increase along the optimal investment schedule. e optimal investment schedule shifts to the right. For each level of investment, the future marginal product of ca e demand for investment goods will decrease along the optimal investment schedule.

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter8: Aggregate Demand And The Powerful Consumer

Section: Chapter Questions

Problem 2TY

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Question

How is optimal investment for the firm affected by an increase in the current capital stock?
A. The demand for investment goods will increase along the optimal investment schedule.
B. The optimal investment schedule shifts to the right. For each level of investment, the future marginal product of capital will increase.
C. The demand for investment goods will decrease along the optimal investment schedule.
D. The optimal investment schedule shifts to the left. For each level of investment, the future marginal product of capital will decrease.

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