For this question, assume that there are decreasing returns to capital, decreasing returns to labor, and constant returns to scale. A reduction in the capital stock will cause which of the following?
A) a reduction in output
B) no change in output
C) an increase in output per capita
D) increase the capital-labor ratio
E) none of the above
A
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A single commercial bank must meet a 25% reserve requirement. If it initially has no excess reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum of
A. $1,500. B. $1,750. C. $1,250. D. $2,000.
The inflation-adjusted percentage change is the nominal percentage change plus the inflation rate.
Answer the following statement true (T) or false (F)
Using the above table, a unit tax of $2 is imposed on the product. How much of the tax is paid by the consumer?
A. $2 B. $1 C. $3 D. unable to determine
Which of the following would cause prices to fall and output to rise in the short run?
a. short-run aggregate supply shifts right b. short-run aggregate supply shifts left c. aggregate demand shifts right d. aggregate demand shifts left