What are the implications for economic growth for countries specializing in consumer goods rather than capital goods? Assume the countries consume what they produce
What will be an ideal response?
All else equal, countries that specialize in consumer goods will likely grow less than those that specialize in capital goods, because specializing in capital goods will allow for more goods to be produced in the future.
You might also like to view...
When interest rates are artificially lowered through expansionary monetary policy,
A) longer-term investment projects appear to be more profitable. B) production of capital goods increases. C) the economy experiences an unsustainable boom phase. D) the economy will likely fall into a recession in the longer run. E) all of the above tend to occur.
The SAS curve shifts if there is a change in
A) the price level. B) real GDP. C) nominal GDP. D) potential GDP.
In a perfectly competitive industry, influence over price is exerted by: a. individual sellers
b. individual buyers. c. the largest firms. d. the forces of market supply and demand.
Which of the following statements describes a shortage?
a. At a lower price, the quantity demanded is below the quantity supplied. b. At the existing price, the quantity demanded is below the quantity supplied. c. At a higher price, the quantity demanded exceeds the quantity supplied. d. At the existing price, the quantity demanded exceeds the quantity supplied.