Assume That the Welter Company Is Renting Capital and Hiring

question 132

Multiple Choice

Assume that the Welter Company is renting capital and hiring labor such that the bang per buck from each resource is the same.If wages of labor increase,its use of labor ________ and capital ________.

• A) increases; falls
• B) falls; falls
• C) increases; increases
• D) stays the same; falls
• E) falls; increases

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Definitions:

Foreign Direct Investment

A company or individual from one country deploying capital into business ventures or assets in another country, whether by setting up operations or purchasing business properties.

Economic Growth

An increase in the production of economic goods and services, compared from one period of time to another, often measured by GDP.

Population Growth

The increase in the number of individuals in a population, often measured as a percentage of the total population over a specific time period.

Catch-Up Effect

The hypothesis that poorer economies' per capita incomes will tend to grow at faster rates than richer economies, allowing them to "catch up" over time.