If an Increase in the Use of One Factor of Production

question 7

Multiple Choice

If an increase in the use of one factor of production lowers the demand for the other, the two factors are:

• A) normal factors of production.
• B) substitute factors of production.
• C) inferior factors of production.
• D) complementary factors of production.

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Definitions:

Government Budget Deficit

A financial situation that occurs when a government's expenditures exceed its revenues in a given fiscal period.

National Saving

National saving, also known as domestic saving, is the sum of private and public saving, representing the part of national income that is not consumed or spent by the government.

Net Exports

The value of a country's total exports minus its total imports, reflecting the trade balance.

Net Capital Outflow

The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners.