Explain how productivity growth has led to labor market realignment in the United States
Productivity has cut jobs drastically in some parts of the economy, sending the labor force to other economic sectors for employment. At the time of the American Revolution, nearly 90 percent of the U.S. labor force had agricultural jobs. Yet today, with less than 2 percent of the nation's labor working on farms, the United States produces such a surplus of products that it sometimes seems unmanageable. At first, after the huge drop in farm jobs was under way, the farm workers shifted to manufacturing, as growing U.S. incomes raised demand for industrial products sharply. Then productivity in manufacturing took off, and workers again had to move elsewhere into the service sector of the economy. Indeed, it has transformed the United States into a "service economy," with more than three-quarters of the labor force employed in services.
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If aggregate output is below the natural rate level, nonactivists of policies would recommend that the government
A) do nothing. B) try to eliminate the high unemployment by attempting to shift the aggregate supply curve to the right. C) try to eliminate the high unemployment by attempting to shift the aggregate demand curve to the right. D) try to eliminate the high unemployment by attempting to shift the aggregate demand curve to the left.
A person has a comparative advantage in an activity whenever she
A) has an absolute advantage in the activity. B) can perform the activity at a lower opportunity cost than another person can. C) can do the activity in less time than anyone else. D) can do everything better than anyone else.
Sustained economic growth occurs when workers' productivity rises
a. True b. False Indicate whether the statement is true or false
If the United States could produce 4 tons of potatoes or 2 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, the country with the comparative advantage in producing wheat is ____ and the country with the absolute advantage in producing potatoes is ____
a. the United States; the United States b. the United States; Ireland c. Ireland; the United States d. Ireland; Ireland