An earthquake destroys a good portion of the capital stock. How would you expect this to affect the capital—labor ratio in the long run? There would be
A) a rightward movement along the saving-per-worker curve and an increase in the capital—labor ratio.
B) no change in the long-run capital—labor ratio.
C) a downward shift in the saving-per-worker curve and a decrease in the capital—labor ratio.
D) a leftward movement along the saving-per-worker curve and a decrease in the capital—labor ratio.
B
You might also like to view...
The process of combining many different debt instruments like home mortgages into a pool of hundreds of thousands of individual contracts and then selling new financial instruments is called
A) Securitization. B) Leveraging. C) Sub-priming. D) NINJA loaning.
A barrier to entry is
A) a term used to explain why monopolies always make economic profits. B) a restriction on the profits that a monopoly can make. C) the situation when the government produces a good instead of relying on private firms to produce the good. D) a restriction on starting a business.
Refer to the graph below. If the economy is initially at equilibrium at the intersection of AD1 and AS1 and there is a tax cut, then, from a skeptical mainstream perspective, the immediate impact is that aggregate:
A. Demand would increase to AD2 and aggregate supply would increase to AS2
B. Demand would increase to AD2 and aggregate supply would remain at AS1
C. Supply would increase to AS2 and aggregate demand would remain at AD1
D. Demand would remain at AD1 and aggregate supply would remain at AS1
Higher breakeven levels of income can be achieved by decreasing
A. Earnings disregards. B. In-kind benefits. C. The marginal tax rate. D. Basic benefits.