Which of the following statements, if any, is correct for a nation that is producing only consumer and capital goods?
A. Other things equal, the more consumer goods a nation produces, the greater will be its
future growth rate.
B. Other things equal, the more capital goods a nation produces, the greater will be its future
growth rate.
C. There is no general relationship between the current division of output between consumer
and capital goods and the future growth rate.
D. None of these statements is correct.
Answer: B
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The equation of exchange is a formula indicating that the number of monetary units times
A) the number of times each monetary unit is spent on final goods and services is identical to the price level times real GDP. B) real GDP is identical to the price level times the number of times each monetary unit is spent on final goods and services. C) nominal GDP is identical to the price level times the number of times each monetary unit is spent on final goods and services. D) the price level is identical to the number of times each monetary unit is spent on final goods and services times real GDP.
If a price floor is a binding constraint on a market, then a. the equilibrium price must be above the price floor
b. the quantity demanded must exceed the quantity supplied. c. sellers cannot sell all they want to sell at the price floor. d. buyers cannot buy all they want to buy at the price floor.