Suppose a Developing Country Receives More Machinery and Capital Equipment

question 140

Multiple Choice

Suppose a developing country receives more machinery and capital equipment as foreign entrepreneurs increase the amount of investment in the economy.As a result

• A)the long-run aggregate supply curve will shift to the right.
• B)the long-run aggregate supply curve will shift to the left.
• C)the economy will move up along the long-run aggregate supply curve.
• D)the economy will move down along the long-run aggregate supply curve.
• E)the short-run aggregate supply curve will shift to the left.

---

Definitions:

Average Cost

A method of inventory costing, or determining an investment's cost, by taking the total cost of items and dividing it by the total number of items.

Capital

Refers to the financial resources that businesses use to fund their operations and growth.

Firm Value

The total worth of a company, determined by factors like its assets, earnings, and market perception.

Financial Leverage

Employing borrowed capital to enhance the potential profit from an investment, which magnifies both possible rewards and risks.