What is the distinction between capital and the services of capital?
What will be an ideal response?
Capital is the actual tools, instruments, machines, buildings, and constructions that have been produced in the past and that businesses now use to produce goods and services. Capital services are the services of the unit of capital. For example, a copy machine at a local Quik Print is capital but the copying performed by the machine is the service of that particular unit of capital.
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If the savings rate in an economy is 30%, and the GDP of the economy is $1,000, then the level of investment in the economy will be:
A) $330. B) $150. C) $600. D) $300.
Suppose the demand curve for medical care services is perfectly inelastic. What will happen to the equilibrium price and quantity if supply increases?
a. Price and quantity will rise. b. Price will stay the same and quantity will rise. c. Price and quantity will fall. d. Price will fall and quantity will increase. e. Price will fall and quantity will stay the same.