Explain the relationship among the capital stock, gross investment, net investment, and depreciation
What will be an ideal response?
The capital stock is the total quantity of plant, equipment, buildings and inventories. Some of this capital stock is always depreciating or wearing out. During a year a firm will purchase new capital. The amount of capital purchased is gross investment. The amount of gross investment minus the amount of depreciation during a year is net investment. So net investment is the change in the capital stock from one period to the next.
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In a market system, prices are determined by
a. corporate executives b. government bureaucrats c. supply and demand d. total market demand e. production costs
The velocity of money increases if:
A. each unit of money is used less frequently. B. each unit of money is used more frequently. C. more purchases are made. D. none of the above answers is correct; the velocity of money is constant.
Since people get sick at all hours of the day, some nurses who work in hospitals are required to work the night shift. In most cases, the nurses who work the night shift earn a higher hourly wage for the same work as the nurses who work the day shift. This difference in pay is referred to as a
a. discriminatory wage practice. b. compensating differential. c. wage inequity. d. a market inefficiency.
The effects of a per-unit tax imposed on sales of an industry's product would likely include
A. a leftward movement along the market supply curve for the product. B. a lower product price at any amount of the product supplied. C. a leftward shift of the market supply curve for the product. D. none of these.