Are there key differences between an increase in the capital stock and an improvement in the level of technology?
What will be an ideal response?
There is no significant difference to an economy between an increase in the capital stock and an improvement in the level of technology. From a graphical perspective, both changes will shift the production function upward, indicating an increase in output with the same level of labor. In terms of productivity, both of these changes increase the productivity of labor, the key variable in determining the economy’s standard of living.
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The crowding-out effect of an expansionary fiscal policy is the result of government borrowing in the market which
A. increases interest rates and net investment spending in the economy. B. increases interest rates and decreases net investment spending. C. decreases interest rates and increases net investment spending. D. decreases interest rates and net investment spending.
______________—a term referring to the extremely elastic situation of demand or supply where quantity changes by an infinite amount in response to any change in price; it is horizontal when graphed.
a. Infinite elasticity b. Zero elasticity c. Constant unitary elasticity d. Perfect inelasticity
Although the law of diminishing returns is widely accepted in economics, it also ensures that the marginal revenue product must be positive
Indicate whether the statement is true or false
The principal determinants of total and average cost curves are the firm's technology and the prices of its inputs
a. True b. False Indicate whether the statement is true or false