Suppose an economy’s real GDP is $50,000 in year 1 and $55,000 in year 2. What is the growth rate of its GDP? Assume that population was 100 in year 1 and 105 in year 2. What is the growth rate in GDP per capita?
What will be an ideal response?
$5000/$50,000 or 10% in year 1. The per capital growth can be calculated as follows: $500 per capital in year 1 ($50,000/100); $523.81 per capital in year 2 ($55,000/105). The change is 23.81 compared to base of $500 or 23.81/500 = 4.77%.
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If the working-age population increases, then
A) the labour force participation rate will increase. B) the total number of people aged 15 years and above will increase. C) the number of people employed will increase. D) the size of the labour force will increase. E) the unemployment rate will increase. B) the total number of people aged 15 years and above will increase.
Nonexcludability causes:
A. firms to supply a lower quantity than they would if they incurred the full costs of the provision of the good. B. people to demand a higher quantity than they would if they had to pay for what they consumed. C. people to demand a lower quantity than they would if they paid for what they consumed. D. firms to supply a higher quantity than they would if they had to pay for what they supplied.
Refer to the following graph. The price of labor is $3 per unit:
How many units of labor should a firm use in order to produce 100 units of output at the least cost?
A. 15 units of labor B. 10 units of labor C. 5 units of labor D. 20 units of labor
Which of the following statements is true of the economy in the long run?
1. real GDP eventually moves to potential because all wages and prices are assumed to be flexible. 2. the economy can achieve its natural level of employment and potential output at any price level. 3. there is no cyclical unemployment. A. I only B. I and II only C. I and III only D. I, II, and III