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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Which of the following is considered by experts to have relatively little power within the Federal Reserve?
A) The Board of Governors B) The president of the New York Federal Reserve Bank C) The economic staff of the Board of Governors D) The Federal Advisory Council
According to the "square-root rule" of the transactions demand for money, the demand for money would
A) vary inversely with the interest rate. B) be zero if there were no costs to switching between money and interest-earning assets. C) vary less than proportionately with income. D) All of the above are correct.