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If a Larger Fraction of GDP Is Devoted to ___________

question 32

Multiple Choice

If a larger fraction of GDP is devoted to ___________, nation's capital stock will grow faster and the aggregate supply curve will shift more quickly to the right, accelerating growth.


Definitions:

Liquid

Describes an asset that can be quickly converted into cash without significant loss of value or a market where such assets can be bought or sold with ease.

Financial Intermediaries

Institutions that facilitate the channeling of funds between savers and borrowers by intermediating financial transactions.

Stocks

Financial instruments that signify ownership in a corporation and represent a claim on part of the corporation's assets and earnings.

Bonds

Bonds are debt securities issued by entities (such as governments, municipalities, or corporations) to raise funds, promising to repay the principal along with interest on a specified date.

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