With time, which one of the following strategies would most likely result in an outward shift in the production possibilities curve of an economy?
A. passage of legislation reducing the workweek to 30 hours.
B. instituting a tax policy encouraging consumption at the expense of investment.
C. instituting a tax policy encouraging investment at the expense of consumption.
D. an increase in the marginal income tax rate, which would reduce the work effort of individuals.
Answer: C
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If productivity growth equals 3.0 percent, the contribution from capital growth 1.2 percent and the contribution from labor growth 2.0 percent, then output growth must equal ________
A) 2.2 percent B) 4.2 percent C) 6.2 percent D) 7.2 percent
Dead capital refers to
A) a capital resource that lacks clear title ownership. B) a capital resource whose owner is deceased. C) a capital resource jointly owned by more than one person. D) a capital resource that has no more useful life.
The law of demand refers to the: a. decrease in price that results as more units of a product are demanded
b. increase in price that results from an increase in demand for a good of limited supply. c. inverse relationship between the price of a good and the quantity demanded. d. increase in the quantity of a good made available when its price increases.
Other things the same, what happens in the long run to the price level and quantity of output after a contraction in aggregate demand?