Question

Economic Growth Skills Check Economic Growth Skills Check Increases in the availability or amount of labour and capital will A Shift the long-run supply curve to the right B. Not change the position of the long-run supply curver C. Shift the long-run supply to the left D. Decrease the output potential of the economy Capital is A Domestic money available for investment B. Annual investment in building & equipment C The stock of structures and equipment used to produce good & services D Foreign money available for investment 6. An inflow of direct forelgn investment will Replace Canadian investment. Increase the long-run supply curve 8. A. B. C. Decrease the long-run supply curve Not change the long-run supply curve Diminishing returns occurs when D. 7. A Each additional unit of capitaMabourer does not increase output B. Each additional unit of capitavlabourer increases output by larger and larger amounts C. Each additional unit of capitalMabourer increases output by smaller and smaler amounts D. You cannot increase output per labourer by adding capital 230r2019- 230/201 12

Answer 1

bu! Ha t fi labour A JexpЛЛt tv На молоча " , " : : : Ay shift the y . 6) Increase in the availability or amount of labour and capital will have A) shift the long-run supply where to the right [Note: Abundance of capital and labour tends to decrease their prices, which inturns reduce the cost of production -As a result of this supply increases, shifting the long-run supply wine to the right, and thereby increasing the potential output of the econonny ] .

7) Capital is : c.). The stock of structures and equipment used to produce goods and services je [Note : Capital is generally referred to as the physical equipments which are used in production: Monetary capital is not considered in the production process].:::, 8) An inflow of direct foreign investment will ..... 6) Increase thee.long-run supply winie. Het Lwote : Foreign Direct Investment inereases the idi capital in a country and thereby expands the .... production capauty. This results in increase in' the long run supply corre] . q). Diminishing Returns ocwrs when e] Each additional output vuito of capital / labotarer Ilme increases output by smaller and smaller amount. Note : First Option, re, (a) corresponds to constant Retrons, Second Option; ie, (B) corresponds to Tucreasing' Rietums and it is possible to increase output per labourer by adding capital (although the marginal product will be diminishing): 1