Which of the following stands true for the determinants of growth?
a. The long-run aggregate supply curve is a horizontal line at the potential level of real GDP.
b. Land can be combined with labor and capital to produce goods and services.
c. The labor force typically grows more rapidly in industrial countries than in developing countries because birth rates are higher in industrial countries.
d. The ability of a country to invest in capital goods is tied to its ability to spend.
e. The size of the labor force is a function of the size of the youth in the population and the percentage of that population that is in the labor force.
b
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The opportunity costs of the firm using its own funds are measured by the:
A) market interest rate. B) inflation rate. C) price level. D) menu costs.
Suppose the economy is producing at the natural rate of output. An open market sale of bonds by the Fed will cause ________ in real GDP in the short run and ________ in inflation in the short run, everything else held constant
A) an increase; an increase B) a decrease; a decrease C) no change; an increase D) no change; a decrease
You decide to buy your friend lunch after she helped you study for your exam. This is an example of the economic concept of:
A. marginal utility. B. altruism. C. reciprocity. D. a Veblen good.
Assume the standard trade model with two countries (Alpha and Beta), two goods (food and drink), and two factors of production (land and labor). Further assume that Alpha is relatively labor-abundant and food is relatively land-intensive. According to the Heckscher-Ohlin theory, Alpha has a comparative advantage in the production of
A. both goods. B. neither good. C. drink. D. food.