Changes in Factor- Utilization Rates Are Considered Important for Explaining

question 35

Multiple Choice

Changes in factor- utilization rates are considered important for explaining short- run changes in real GDP because

• A)additions to the labour force occur more frequently than changes in the utilization rate .
• B)changes to the capital stock are almost impossible to make in the short run.
• C)the employment ratio of labour and the amount of excess capacity respond quickly to changes in aggregate demand or supply.
• D)land and capital can change only in the short run.
• E)wages increase and decrease rapidly in the short run, dampening the effect of factor utilization.

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Definitions:

Collusion

A secret or illegal cooperation or conspiracy, especially between businesses to limit competition and raise prices.

Marginal Cost

The financial outlay involved in producing a supplementary unit of a good or service.

Crude Oil

A naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials, used as a primary energy source.

Industry Output

The total production of goods and services produced by a specific sector of the economy over a given period.