Multiple choice

Which of the following statements is true?

  1. Accumulation of capital depends solely on income.

  2. Savings can also be affected by the state.

  3. External economies go with size and internal economics with location.

  4. Supply curve of labour is an upward slopping curve.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Savings can be affected by the state through fiscal policy (tax rates, public spending), monetary policy (interest rates), and regulations. Option A is wrong because capital accumulation depends on both income AND the savings rate (propensity to save). Option C incorrectly pairs external/internal economies with size/location. Option D is wrong because the labour supply curve can be backward-bending at high wage levels.

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