Investments in both physical and human capital enhance economic growth because they:
A. increases consumption during the current period.
B. makes it possible for individuals to produce more goods and services per hour worked.
C. encourages firms to expand output by employing more low-productivity workers.
D. encourages workers to unionize and, thereby, fight for higher wages.
Answer: B
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
In the short run, a decrease in the money supply causes interest rates to
a. increase, and aggregate demand to shift right. b. increase, and aggregate demand to shift left. c. decrease, and aggregate demand to shift right. d. decrease, and aggregate demand to shift left.
Which of the following will cause a movement along the supply curve for oil?
A) new technology to drill oil from existing oil wells B) an increase in the price of oil C) an increase in the number of oil producers D) government tax on oil producers in Texas
When the actual inflation rate turns out to be greater than the expected inflation rate, who gains—the borrower or the lender—and who loses? Explain why
What will be an ideal response?