Question

The purchase of capital goods, like ____ consumer goods, can be postponed; it tends to contribute to _____ in investment spending.

Answer 1

Answer:

The correct answer is durable; instability.

Explanation:

The stock of capital goods in hand affects investment spending. If there are sufficient capital goods in hand, the purchase of more goods will be uneconomical.

Capital goods are durable so their purchase can be postponed just like durable consumer goods. But this makes changes in investment spending unpredictable and unstable.