1. When the capital stock decreases, firm increase their investment because _____________ increases.
A. the future marginal product of capital
B. the future marginal product of labor
C. the current marginal product of labor
D. the current marginal product of capital
2. Following an increase in government spending, the output supply curve shifts right because ____________ increases
A. The capital stock
B. Equilibrum Employment
C. Total factor productivity
D. All the above
1. When the capital stock decreases, firm increase their investment because _____________ increases.
A. the future marginal product of capital
B. the future marginal product of labor
C. the current marginal product of labor
D. the current marginal product of capital
2. Following an increase in government spending, the output supply curve shifts right because ____________ increases
A. The capital stock
B. Equilibrum Employment
C. Total factor productivity
D. All the above
Related textbook solutions
Related questions
The labor supply curve shift following a decrease in the capital stock is a result of _____________.
A. intertemporal substitution of leisure
B. a negative income effect
C. consumption smoothing
D. a positive income effect
When current total factor productivity increases:
A. firms sell capital because the remaining capital is more productive
B. firms hire more workers because the marginal product of labor increases.
C. firms hire fewer workers because the remaining workers are more productive
D. firms increase investment because the marginal product of capital increases
Which of the following correctly explains why the labor demand curve doesn't shift following an increase in government spending?
| A. There is no substitution effect. B. There is no income effect. C. There is no change in the wage rate D. There is no change in the marginal product of labor. |
