Increases in productivity are caused by
A. better education and training of the labor force.
B. higher levels of literacy.
C. improvements in technology.
D. All of these responses are correct.
Answer: D
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An exchange of developing country debt for an ownership position in a developing country business is called
A) IMF conditionality. B) indirect investment. C) debt-equity swap. D) debt-rescheduling.
The LM curve will be vertical and fiscal policy ineffective when
A) the demand for money is unaffected by changes in the interest rate. B) the demand for money is unaffected by changes in income. C) investment is unaffected by changes in the interest rate. D) investment is unaffected by changes in income.
Answer the following statements true (T) or false (F)
1) If competitive firms spent money on advertising their product, their profits would decrease. 2) The profit-maximizing quantity and price is determined after the optimal amount of advertising is determined. 3) To maximize profits, managers should purchase the quantity of advertising that maximizes gross profit. 4) If a firm only has one advertising medium, it maximizes its profit by first setting the marginal benefit from its product equal to its marginal cost of production and then determining the optimal amount to advertise. 5) It is possible for firms to not maximize profits even if they have optimally allocated their fixed advertising budget.
Refer to the above figure. The equilibrium level of real GDP occurs
A) at point A. B) to the right of point A. C) to the left of point A. D) at the undetermined point on the graph depending upon the level of investment.