The relationship between stock prices and firms' investments in physical capital is captured by what theory?
A. q theory
B. Yield-curve theory
C. User-cost-of-capital theory
D. Keynesian theory
Answer: A
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Suppose two goods (X and Y ) are being produced efficiently and that the production of X is always more labor intensive than the production of Y. Production depends only on two factors (capital and labor); these may be smoothly substituted for each other. The total quantities of these inputs are fixed. An increase in the production of X and a decrease in the production of Y will
a. increase the capital-labor ratio in each firm. b. decrease the capital-labor ratio in each firm. c. leave the capital-labor ratio for each firm unchanged. d. increase the capital-labor ratio in Y production and decrease the capital-labor ratio in X production.
In which of the following countries are citizens required to vote?
a. Greece b. Canada c. United States d. France
If increases in government spending lead to inflation, the value of the multiplier is reduced
a. True b. False Indicate whether the statement is true or false
Henry Ford’s use of mass-production techniques to produce cars faster and cheaper illustrates how ______.
a. production innovations can create economies of scale b. problems set in when manufacturing increases quickly c. assembly lines removed the need for a large workforce d. an increasing output level raises the average total cost