What is the effect on real GDP per person if labor productivity increases?
What will be an ideal response?
Real GDP equals (aggregate hours) × (labor productivity). Hence an increase in labor productivity increases real GDP. Real GDP per person equals (real GDP)/(population). Therefore an increase in real GDP with no change in the population increases real GDP per person.
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Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $15, we would expect that
A) price will decrease until quantity demanded equals quantity supplied. B) supply will increase until quantity demanded equals quantity supplied. C) demand will decrease until quantity demanded equals quantity supplied. D) there will be no change in the price since the market is in equilibrium.
Refer to Figure 14.3. Suppose the economy is initially at long-run equilibrium and the Fed increases the target inflation rate, and to hit this rate, it must reduce the real interest rate. The economy then reaches a new, short-run equilibrium point
Assuming expectations are adaptive, the next movement is best represented as a movement from A) point C to point B. B) point C to point A. C) point D to point C. D) point B to point C.
The statement: "If everyone trades in the competitive marketplace, all mutually beneficial trades will be completed, and the resulting equilibrium allocation of resources will be economically efficient." is formally known as:
A) the law of supply and demand. B) the first theorem of supply and demand. C) the first theorem of welfare economics. D) the first theorem of efficiency in economics.
An "equal opportunity" admissions process to college would widen educational disparities between whites and blacks
Indicate whether the statement is true or false