Suppose the Supply of Capital Decreases

question 37

True/False

Suppose the supply of capital decreases. As a result, the quantity of capital used in production and the rental price of capital will both fall.

---

Definitions:

Import Restraints

Measures applied by countries to limit the quantity of goods that can be imported, such as tariffs and quotas.

Trade Surpluses

A situation where a country's exports exceed its imports, leading to a positive balance of trade.

Balance of Trade

The difference between a country's exports and imports of goods, indicating the net earnings from trade.

Income Disparities

The difference in earnings among individuals or groups, often highlighting the economic inequality within a society.