The role that dead capital plays in a country's economic growth is that
A. growth neither increases nor is impaired by dead capital.
B. growth increases because the dead capital is replaced with more technologically efficient capital.
C. growth increases since the firms using the dead capital are using it for free.
D. growth is impaired since the capital cannot be allocated to its most efficient use.
Answer: D
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Suppose that real GDP grows by 3 percent a year, the quantity of money grows 6 percent a year, and velocity grows by 1 percent. In the long run, the inflation rate equals
A) 12 percent. B) 9 percent. C) 10 percent. D) 4 percent. E) 5 percent.
The marginal rate of substitution measures the slope of the:
a. total utility curve. b. demand curve. c. budget line. d. indifference curve.
Assume that there is a $20 billion increase in government purchases. If MPC = 0.8, the sum of the indirect effect on aggregate demand through induced additional consumption purchases is equal to: a. $16 billion
b. $20 billion. c. $80 billion. d. $100 billion.
More than three-fourths of the unemployed are recent entrants into the labor force
a. True b. False Indicate whether the statement is true or false