Long-Term Increases in Productivity That Have Increased the Demand for Labor

question 63

Multiple Choice

Long-term increases in productivity that have increased the demand for labor, and raised real wages, have resulted primarily from ________ and ________.

• A)technological progress; a modernized capital stock
• B)technological progress; an increased labor supply
• C)a modernized capital stock; skill-biased technological change
• D)a modernized capital stock; an increased labor supply

---

Definitions:

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment by calculating the present value of expected cash flows minus the initial cost.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Capital Rationing

The practice of limiting investments or expenditures in new projects due to budget constraints or capital availability.

IRR

IRR (Internal Rate of Return) is a financial metric used to evaluate the profitability of an investment, representing the interest rate at which the net present value of cash flows from the investment is zero.