Economics (AS & A Level) · May / June 2023 · Paper 32 · Question 18

Which statement best describes demand-induced investment?

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

As printed in the paper