Long-lived goods used to produce other goods and services are called:
A. human capital.
B. inventories.
C. financial capital.
D. physical capital.
Answer: D
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According to the traditional Keynesian school of thought, expansionary fiscal and monetary policy will: a. increase interest rates, thereby shifting the investment function to the right. b. reduce both consumption and investment spending, thereby eliminating all inflationarypressures
c. reduce investment spending, thereby stabilizing the aggregate supply shocks. d. stimulate both consumption and investment spending, thereby increasingaggregate demand. e. shift the aggregate demand curve to the left, thereby reducing the unemployment rate.
If you believe that velocity is constant and that the aggregate supply curve is horizontal, then the quantity theory of money would predict that a doubling of the money supply would cause a doubling of the
a. price level and real output. b. price level. c. price level and no change in real output. d. real output.
Which of the following would be most likely to shift the long-run aggregate supply curve (LRAS) to the right?
a. favorable weather conditions that increased the size of this year's grain harvest b. an increase in resource prices relative to product prices c. an increase in labor productivity as the result of improved computer technology and expansion of the Internet d. an increase in the cost of security as the result of terrorist activities
If speculators bid up the value of the dollar in the market for foreign-currency exchange, U.S. aggregate demand would shift to the left
a. True b. False Indicate whether the statement is true or false