The aggregate production function shows that an economy increases its real GDP in the short run by
A) developing new technologies.
B) increasing its physical capital stock.
C) using more labor.
D) exploring for new deposits of natural resources.
C
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Refer to Figure 14.3. To maximize total wages paid to workers, the labor union will agree to wage rate:
A) W0. B) W1. C) W2. D) W3. E) none of the above
Free markets produce allocatively efficient outcomes and have no flaws.
Answer the following statement true (T) or false (F)
If the aggregate supply curve is vertical, then shifts in aggregate demand will not change aggregate output
a. True b. False Indicate whether the statement is true or false
When the price level increases, the purchasing power of money:
A. decreases. B. stays the same since the purchasing power of money is not impacted by price levels. C. increases by a similar amount. D. first increases and then decreases as people get used to higher prices.