In the Long Run, What Determines the Level of Total

question 65

Multiple Choice

In the long run, what determines the level of total production of goods and services in an economy?

• A)the interest rate and the amount of national saving
• B)Bthe quantity of capital and labor and production
• C)technology consumption, investment, and government spending
• D)the marginal products of capital and labor, constant returns to scale, and competition

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Definitions:

Labor Content

The total amount of work, measured in hours or costs, required to produce a good or service.

Transportation Cost

Expenses incurred in moving goods from one location to another, including freight charges, fuel costs, and labor.

Hidden Costs

Expenses that are not obvious at the initial stage but emerge during the process or lifecycle of a project, product, or service.

Cash Flow

The total amount of money being transferred into and out of a business, affecting its liquidity, operations, and financial health.