Suppose That the Capital Stock Grows More Slowly Than the Labor

question 154

Multiple Choice

Suppose that the capital stock grows more slowly than the labor force and there is no technological growth. This would cause

• A)a downward shift of the productivity curve and a downward movement along the productivity curve.
• B)an upward movement along the productivity curve.
• C)a downward shift of the productivity curve.
• D)a downward movement along the productivity curve.
• E)an upward shift of the productivity curve.

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Definitions:

Prices Rise

An economic phenomenon where the general level of prices for goods and services increases over time.

Futures Contract

An arrangement, enforceable by law, where individuals agree to trade a specified commodity or financial instrument at a previously established price, to be fulfilled at a specified time ahead.

Forward Contract

is a non-standardized contract between two parties to buy or sell an asset at a specified future date for a price agreed upon today.

Settlement Date

The date on which a trade is finalized, and the buyer must make payment and the seller must deliver the asset.