Assume That an Economy Is in Equilibrium When There Occurs

question 39

Multiple Choice

Assume that an economy is in equilibrium when there occurs an increase in the supply of capital.The available quantity of labor remains fixed.Once the economy has adjusted to its new equilibrium,which of the following has increased?

• A)the real wage
• B)the rental price of capital
• C)the share of capital income in national income
• D)all of the above
• E)none of the above

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Definitions:

Building Account

An account used in accounting to track the costs associated with the construction or purchase of a building.

Operating Lease

A leasing arrangement that allows for the use of an asset without transferring ownership rights, typically treated as an operating expense in financial statements.

Long-Term Asset

An asset that is expected to provide economic benefits to a business for more than one fiscal year, such as property, plant, and equipment.

Revenue Expenditure

A type of expenditure that does not result in the acquisition of long-term assets and is rather incurred in the day-to-day operations of a business.