If a country increased the production of its capital goods, then
A) the more consumption of goods we can have today.
B) the less consumption we can have today, but we will have more in the future.
C) the more unemployed resources there will be in the future.
D) the more unemployed resources there are today.
Answer: B
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The curve that displays total planned real spending on goods and services at each price level by households, businesses, the government, and foreign residents is called
A) the employment curve. B) the aggregate demand curve. C) the price level curve. D) the aggregate supply curve.
When PPP does not hold in the short run, economists have developed an alternative short run explanatory theory based on the idea that:
a. currency values are different from other prices, since currencies are not considered assets. b. currency values are influenced in the short run because they serve as short-term assets. c. currency values will eventually result in PPP over time, so no short-run theory is needed. d. currency values are set by government entities and the IMF so the value often does not result in PPP.