Why is growth in GDP different from growth in a nation's standard of living? Is it possible for a nation's GDP to grow while its standard of living falls?
What will be an ideal response?
The standard of living is measured by real GDP per person, so growth in the standard of living equals growth in real GDP per person. The growth rate of real GDP per person equals the growth rate of real GDP minus the growth rate of the population. Hence it is indeed possible for a nation's GDP to grow, while its standard of living decreases. This outcome occurs whenever the population grows more rapidly than real GDP.
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A general sales tax and a value-added tax have _____
a. a common tax base b. nothing in common c. rates in common d. investment as a tax base e. a and d
Which of the following will most likely occur under a system of clearly defined and enforced private property rights?
What will be an ideal response?
Hurricane Katrina destroyed much of New Orleans and other parts of the South. Which of the following statements is true? The hurricane:
A. caused the production possibilities frontier of the United States to shift. B. caused the production possibilities to increase, since it created a lot of work to rebuild the city affected areas. C. caused the production possibilities frontier of the United States to shift in. D. didn't change the production possibilities frontier, but moved from a point on the frontier to a point inside the frontier.
In the late 1980s, the health benefits of oat bran were widely advertised. If the price of oats increased 50%, causing the quantity of oats supplied to increase by 40%, then the price elasticity of supply was
A) 1.25. B) -1.25. C) -0.80. D) 0.80.