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Economics · May / June 2022 · Paper 11 · Question 13

2281Firms and production

The development of artificial intelligence in machines raises the productivity of capital. What will be the effect of this?

  1. AThe costs of production will increase.
  2. BThe demand for capital will increase.
  3. CThe price of capital will fall.
  4. DThe supply of capital will decrease.

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Correct answer: B. The demand for capital will increase.

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