Desired Level of the Capital Stock

question 34

Multiple Choice

Desired Level of the Capital Stock
-Consider the two graphs above.Suppose that financial liberalization enables more businesses to access credit markets.This would ________ the desired level of the capital stock,as depicted in graph ________.

• A)increase;B
• B)increase;A
• C)decrease;B
• D)decrease;A

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Definitions:

Rich Country

A nation characterized by a high gross domestic product (GDP) per capita, indicating a high standard of living, advanced technological infrastructure, and a well-developed economy.

Nonrenewable Resource

A nonrenewable resource is a natural resource that cannot be replenished or takes a very long time to replenish at the same rate it is consumed or used.

Saving Rates

The proportion of disposable income that is saved by households rather than spent on goods and services.

Real GDP

The total market value of all final goods and services produced in a country in a given year, adjusted for inflation.