As capacity utilization in an economy rises:
a. firms sell their fixed assets to remain solvent.
b. the gap between the potential output and actual output widens.
c. firms reduce their demand for labor.
d. employment of inputs by firms declines.
e. firms add more factories and machines and increase output.
e
You might also like to view...
According to this Application, over the past few years there has been a ________ increase in ________ of automobile parts from outside the United States and Canada
A) large; imports B) large; exports C) small; imports D) small; exports
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
The value of a loan of $50,000 after a year at 2 percent interest is:
A. $49,000. B. $1,000. C. $52,000. D. None of these is true.
Suppose that the MPC is 0.7, there is no investment accelerator, and there are no crowding-out effects. If government expenditures increase by $30 billion, then aggregate demand
a. shifts rightward by $100 billion. b. shifts rightward by $51 billion. c. shifts rightward by $170 billion. d. shifts rightward by $72.8 billion.