Investment in Capital Stock Drives Prices Up, Impacting Global Economies.
Prices and investment are closely linked in the business world. A study looked at how firms make pricing and investment decisions when facing financial constraints and slow customer responses. They found that when firms invest in new equipment, prices tend to go up. Additionally, the cost of labor and competitors' prices also impact the final price of products. The study showed that in times when firms have limited financial resources, investments have a stronger effect on prices.