An Increase in the Amount of Physical Capital Will Cause

question 234

Multiple Choice

An increase in the amount of physical capital will cause

• A) an increase in both aggregate demand and real GDP, but have no effect on the price level.
• B) aggregate demand and aggregate supply to increase by the same amounts, causing real GDP to increase and the price level to remain constant.
• C) an increase in both aggregate supply and real GDP, but have no effect on the price level.
• D) an increase in both aggregate supply and real GDP and a reduction in the price level.

---

Definitions:

Strict Foreclosure

A legal process by which the secured lender obtains the title to the mortgaged property without the sale thereof, when the borrower fails to meet the obligations.

Deficiency

The difference between the amount owed on a loan and the amount recovered from selling the asset securing the loan if the latter is less.

Mortgagor

A mortgagor is an individual or entity who borrows money to purchase property and pledges that property as security for the loan.

Mortgagee's Interest

The financial interest a lender has in the property serving as collateral for a loan until the mortgage is fully repaid.