Holding other factors constant, a technological improvement that increases the marginal product of capital will:
A. decrease investment.
B. increase investment.
C. increase national saving.
D. decrease national saving.
Answer: B
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According to the short-run Phillips curve, the unemployment rate and the inflation rate are
A) negatively related. B) unrelated. C) positively related. D) unaffected by monetary policy.
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Net foreign lending would be equal to
A) -$4 billion. B) -$2 billion. C) $2 billion. D) $4 billion.
Which of the following examples would use the three-step method?
a. Elena wants to determine what the marginal revenues are for her clothing store. b. Ivan wants to find out if his toy store is earning an economic profit. c. Jan wants to determine what the marginal costs are for his sports store. d. Zofia wants to find out if her thrift store is earning more total revenue than a competitor’s store.
Suppose velocity is 3, real output is 9000, and the price level is 1.5. What is the level of real money demand in this economy?
A. 6000 B. 2000 C. 30,000 D. 3000