Which of the following statements is true?
A)Changes in the total capital stock of the economy and in the amount of labour that firms employ occur quickly.
B)Changes in the total capital stock of the economy and in the amount of labour that firms employ occur slowly.
C)Changes in the total capital stock of the economy occur slowly,while changes in the amount of labour that firms employ occur quickly.
D)Changes in the total capital stock of the economy occur quickly,while changes in the amount of labour that firms employ occur slowly.

Question

Quizplus · Accepted Answer

Changes in the total capital stock of the economy occur slowly because it takes time for businesses to invest in new capital goods and for these new goods to become available for production. On the other hand, changes in the amount of labour that firms employ can occur more quickly since businesses can adjust their hiring practices more easily than investing in new capital goods.

Which of the Following Statements Is True