The problem of dead capital can be eliminated by
A. making it easier for people to establish legal ownership of productive capital.
B. restricting population growth.
C. increasing the labor force participation rate.
D. returning all privately owned capital to the government.
Answer: A
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Answer the following questions true (T) or false (F)
1. In reality, because few markets are perfectly competitive, some loss of economic efficiency occurs in the market for nearly every good or service. 2. Market power in the United States causes a huge loss of economic efficiency. 3. A profit-maximizing monopoly produces a lower output level than would be produced if the industry was perfectly competitive.
Refer to the data. National income is:
A. $395.
B. $380.
C. $375.
D. $360.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
To combat a recession, Keynesian fiscal policy recommends:
a. an increase in taxes. b. an increase in government spending. c. an increase in taxes and a decrease in government purchases to balance the budget. d. a reduction in both taxes and government spending.