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1 | |
The difference between gross investment and net investment is
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| | A) | depreciation of the existing capital stock
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| | B) | productive investment
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| | C) | dwellings
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| | D) | inventories
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2 | |
The value of an asset depends upon
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| | A) | its scrap value
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| | B) | its depreciation
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| | C) | the present value of the future stream of income it can earn
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| | D) | the cost of loans
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3 | |
The marginal value product of capital is the __________________
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| | A) | change in a company's balance sheet when it acquires new plant
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| | B) | additional value of output from using more capital
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| | C) | change in a company's share price
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| | D) | changing value of the capital stock
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4 | |
In the short run, the supply of capital is ____________ and in the long run will depend on ____________
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| | A) | variable, technology
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| | B) | fixed, expectations
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| | C) | fixed, rental rate of capital
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| | D) | variable, interest rates
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5 | |
If workers get a real wage increase this will likely _______________ and ____________
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| | A) | encourage the use of more capital in the long run, reduce demand for all inputs
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| | B) | encourage the use of more capital, increase demand for all inputs
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| | C) | encourage the use of less capital, reduce demand for all inputs
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| | D) | encourage the use of less capital, reduce demand for all inputs
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6 | |
Land will be allocated between competing uses so that _______________
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| | A) | housing gets priority
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| | B) | industry gets priority
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| | C) | farming gets priority
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| | D) | the equilibrium rental rate equilibrates total demand with supply
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7 | |
Different capital intensity in different industries is mainly explained by _________ and _________
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| | A) | wage differentials, skill levels
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| | B) | technology, the ease of factor substitution
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| | C) | government grants, international competition
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| | D) | patents, skill shortages
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8 | |
The functional distribution of income shows how national income is divided between
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| | A) | employees
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| | B) | the population
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| | C) | the factors of production
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| | D) | the working population
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9 | |
The demand for capital services is derived from a falling MVPK schedule
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| | A) | TRUE
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| | B) | FALSE
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10 | |
The supply elasticity of land is normally greater in the long run than in the short run
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| | A) | TRUE
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| | B) | FALSE
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11 | |
A major cause of income inequality in the UK is trade union power
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| | A) | TRUE
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| | B) | FALSE
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2002 A McGraw-Hill Online Learning Centre