The total amount spent on new capital in a time period is equal to
A) wealth.
B) gross investment.
C) depreciation.
D) net investment.
B
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The supply curve of labor to industry in the Lewis model is horizontal if there is surplus labor in agriculture. This condition persists as long as
a. the marginal product of labor is less than the average product of labor in agriculture. b. the marginal product of labor in agriculture is less than the marginal product of labor in industry. c. there are diminishing returns to labor in agriculture. d. the marginal product of labor in agriculture is zero.
A technological breakthrough that increases the marginal productivity of capital would increase the
a. demand for loanable funds, leading to a lower equilibrium market interest rate b. supply of loanable funds, leading to a lower equilibrium market interest rate c. demand for loanable funds, leading to a higher equilibrium market interest rate d. supply of loanable funds, leading to a higher equilibrium market interest rate e. supply of loanable funds but have no impact on the equilibrium market interest rate