Explain how changes in the stock of capital affect aggregate supply
Changes in the stock of capital will alter the amount of goods and services the economy can produce. Investing in capital improves the quantity and quality of the capital stock, which lowers the cost of production in the short run. This change in turn shifts the short-run aggregate supply curve rightward and firms will supply more output at every price level. It also allows output to be permanently greater than before, shifting the long-run aggregate supply curve rightward, ceteris paribus.
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If scarcity was not a fact, a. people could have all they wanted of goods and services for free
b. it would no longer be necessary to make choices. c. poverty, defined as the lack of a minimum level of consumption would also be eliminated. d. all of the above would be true.
A bank receives a demand deposit of $2,000 . The bank loans out $1,200 of this deposit and increases its excess reserves by $600 . What is the required reserve ratio?
a. 10% b. 30% c. 40% d. 60%