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10. What is the impact of costly investment on external wealth in the long run? (a)...

10. What is the impact of costly investment on external wealth in the long run?
(a) It decreases external wealth.
(b) It increases external wealth.
(c) It may decrease or increase external wealth.
(d) It has no impact on external wealth.

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Answer #1

Option C.

A costly investment will fetch good return in the long run or may lead to lower return in the long run. Because if it is costly, then it will also be risky. Thus, it depends on the economic environment. It may lead to increase in external wealth or decrease in external wealth in the long run.

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