Which of the following is closest to the definition of capital?
a. c and e.
b. c and d.
c. Tools, equipment, means of transportation
d. Factories and machinery.
e. Borrowed money.
b
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Define the marginal propensity to consume (MPC) and the marginal propensity to save (MPS), and explain why MPC + MPS always equals 1
What will be an ideal response?
If the economy is at full employment, then the unemployment rate
A) is greater than the natural unemployment rate. B) is equal to the natural unemployment rate. C) is below the natural unemployment rate. D) is equal to zero. E) can be anywhere on a short-run Phillips curve.
If the federal government runs a budget deficit, but the budget deficit as a percent of GDP is less than the growth rate of real output, the
a. national debt will decrease as a share of GDP. b. national debt will remain a constant share of GDP. c. national debt will increase as a share of GDP. d. size of the national debt (in dollar value) will decline.
The quantity theory of money of the Classical economists says that a change in the money supply will produce a:
A. proportional change in the price level. B. greater than proportional change in the price level. C. less than proportional change in the price level. D. wide variation in the velocity of money.