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

Understand the principles of public choice theory and how it applies to the political process and government decision-making.

Recognize the impact of government activities and projects on economic efficiency and social welfare.

Analyze the relationship between the distribution of costs and benefits of public projects and their acceptance or rejection by voters.

Identify the factors that lead to the acceptance of productive (efficient) and the rejection of counterproductive (inefficient) government activities.

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Definitions:

Assigned Contractual Rights

The transfer of one party's rights under a contract to another party, allowing the assignee to benefit from the contract.

Purchaser

An individual or entity that buys goods or services.

Quality of Goods

The degree to which goods meet the specified or implied criteria, often assessed in terms of durability, reliability, and performance.

Holder in Due Course

A party that has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defenses and claims that could be asserted against the original payee.