One Could Correctly Argue That Higher Capital Productivity Would

question 166

Multiple Choice

One could correctly argue that higher capital productivity would

• A) increase the value of capital and the supply of loanable funds.
• B) reduce the value of capital and the supply of loanable funds.
• C) only affect interest rates in the long run.
• D) increase the value of capital and the demand for loanable funds.
• E) reduce the value of capital and the demand for loanable funds.

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or volume of production.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain range or period.

Operating Income

This refers to the profit realized from a business's operations, calculated by subtracting operating expenses from gross profit.

Sales Price

The amount that a customer pays to purchase a good or service from a business.