Investment in both physical and human capital tends to enhance economic growth because it generally
a. increases consumption during the current period.
b. makes it possible for individuals to produce more goods and services per hour worked.
c. encourages firms to expand output by employing more low productivity workers.
d. encourages workers to unionize and thereby fight for higher wages.
B
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The narrowest definition of the money supply (M1) includes
a. cash and travelers' checks. b. cash, travelers' checks, and savings account balances. c. cash, checking account balances, and travelers' checks. d. cash, bank deposits, and money market accounts.
Figure 10-6
In the short-run equilibrium depicted in , the economy's output is
a.
equal to potential GDP.
b.
less than potential GDP.
c.
greater than potential GDP.
d.
equal to the economy's full-employment output.