The term capital, as used by economists, refers to
a. money
b. the physical space in which production occurs
c. the time allocated to producing goods and services
d. financial securities such as stocks and bonds
e. machinery and equipment that is not used up during the production process
E
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According to the wealth effect, if real wealth decreases then people
A) decrease their consumption expenditure. B) increase their consumption expenditure. C) do not respond if their nominal wealth does not change. D) decrease their consumption expenditure only if their nominal wealth also decreases.
If the demand for a good is elastic, then total revenue
a. increases as price increases b. remains constant as quantity demanded increases c. increases as price decreases d. decreases as quantity demanded increases e. decreases as price decreases
If the government collects $10,000 in tax revenue and turns around and spends $10,000 to build a new road, and the MPC is 0.5, national income
a. is unchanged b. increases by $5,000 c. increases by $10,000 d. increases by $15,000 e. increases by $20,000
If aggregate demand shifts right, then eventually price level expectations rise. This increase in price level expectations causes the aggregate demand curve to shift to the left back to its original position
a. True b. False Indicate whether the statement is true or false