In the classical theory of growth, what is the final outcome of an increase in growth and labor productivity?
What will be an ideal response?
In the classical growth theory, a rise in labor productivity and the resulting economic growth result in a population explosion that drives real GDP per person back to the subsistence level. In the classical viewpoint, resources are limited and technological change occurs infrequently, so that technological advances are not sufficient to compensate for the lack of resources. Hence, in the long run people earn only a subsistence level of real income.
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Refer to Figure 18.1. The opportunity cost of hang gliders in Canada is
A) 1/4 of a bicycle. B) 1/2 of a bicycle. C) 2 bicycles. D) 4 bicycles.
Refer to the figure above. What is the gain in the market-wide consumer surplus when the price of calculators changes from $6 to $3?
A) $565 B) $580 C) $950 D) $1050
Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes that
A) Beth should produce both goods because she can produce more of both goods in an hour than can Joe. B) Beth should produce sandwiches and Joe should produce pizza. C) Beth should produce pizza and Joe should produce sandwiches. D) Beth should produce both goods and Joe should produce sandwiches.
Which of the following is not included in a nation's balance of payments?
a. Imports and exports of services. b. International interest and dividend earnings. c. Total holdings of the central bank's international reserves. d. All of the above are included in the balance of payments.