The growth rate of potential GDP depends on
a. the rate of technical progress.
b. the growth rate of the capital stock.
c. the growth rate of the labor force.
d. all of the above.
d
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Assume that coffee and tea are substitutes. Given a downward sloping demand curve for tea, an increase in the price of tea will cause
A) an increase in the demand for coffee. B) a decrease in the demand for coffee. C) a leftward shift of the demand curve for tea. D) a leftward shift in the demand for coffee.
If everyone earned the same income, the Lorenz curve would be
A) a rectangular hyperbola. B) a straight line from the origin at a 45-degree angle. C) the horizontal axis. D) very bowed from the diagonal.
The statement "government should provide affordable health care coverage for every member of society" is:
A. a statement that everyone agrees with. B. a positive statement. C. a statement that everyone disagrees with. D. a normative statement.
The market will:
a. Always provide the optimal mix of output. b. Overproduce goods that yield external benefits. c. Produce an optimal amount of goods that generate external costs. e. Underproduce goods that generate external benefits.