In the Short Run, the Level of Real GDP Changes

question 168

Multiple Choice

In the short run, the level of real GDP changes with changes in the

• A) amount of capital used because the labor force is fixed.
• B) level of technology because the labor force and capital are fixed.
• C) money wage rate because it is assumed to be fully flexible.
• D) quantity of labor because capital and technology are fixed.
• E) amount of employment and amount of capital because technology is fixed.

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Definitions:

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Dispose of Cars

The process of getting rid of old or unwanted vehicles through methods such as selling, recycling, or scrapping.

Production Function

A mathematical representation that describes the relationship between input factors of production (like capital and labor) and the output of goods or services.

Cartoonists' Labor

The work and creative effort put in by cartoonists to produce cartoons and comic art.