Economists often treat the economy's capital stock as fixed because
A) labor is a more important factor of production than capital, so economists ignore capital.
B) it takes a long time for new investment and the scrapping of old capital to affect the overall quantity of capital.
C) there is very little capital in the economy compared with the amount of labor.
D) unless the interest rate changes, the capital stock doesn't change.
B
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The "accelerator hypothesis" of investment states that a firm's net investment is most closely related to the
A) level of its actual sales. B) change in its actual sales. C) level of its expected sales. D) change in its expected sales.
Which of the following is a determinant of consumer demand?
A) expectation of the future relative price of a product B) taxes imposed on firms that sell the product C) cost of inputs used to produce the product D) number of firms that produce the product
A union can be viewed as a monopoly seller of a service. What are the three wage and employment strategies the union might use?
What will be an ideal response?
Which of the following is an example of industrial policy?
a. Government imposing a high rate of taxes on the profits of large corporate houses b. Government spending more on the construction of roads and bridges than on education c. Government imposing a high rate of taxes on the import of goods and services d. Government charging lower rate of taxes on the import of goods and services e. Government selling imported cash crops at a subsidized rate