Question

21. When opening a restaurant, you may need to buy ovens, freezers, tables, and cash registers. What do economists call these expenditures? a. capital investment b. investment in human capital c. business consumption expenditures d. inventories 22. When the price of cotton has risen 12 percent, how could the misperception effect lead cotton producers to increase their output when they otherwise would not have? a. if overall prices have risen 12 percent b. if input prices have risen 12 percent c. if overall prices have risen 4 percent d. if overall prices have risen 20 percent 23. Given a constant rate of growth of real GDP, what would lead to an increasing real GDP per capita? a. an increase in the capital stock b. a rate of population growth that is less than the rate of growth of real GDP c. a rate of population growth that is greater than the rate of growth of real GDP d. an increase in the size of the labour force 24. What do people who buy newly issued stock in a corporation such as Rockwood Pottery Ltd. provide? a. They buy debt finance and so become creditors of Rockwood. b. They buy debt finance and so become part owners of Rockwood. c. They buy equity finance and so become part owners of Rockwood. d. They buy equity finance and so become creditors of Rockwood.

Answer 1

21. When opening a restaurant, the purchase of ovens, freezers, tables and cash registers are capital investment because these are the assets to the business.

Answer: Capital investment