Define labor productivity. Discuss the relationship between labor productivity, human capital growth, and technology change
What will be an ideal response?
Labor productivity is real GDP per hour of labor, so it equals (real GDP) รท (aggregate hours). The expansion of human capital and the discovery of new technology are two factors that increase labor productivity. Increasing human capital increases labor productivity because workers' skills and knowledge increase, which allows them to produce more goods and services without boosting aggregate hours. Similarly, the discovery and use of new technologies allows workers to produce more goods and services without increasing aggregate hours.
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What is the key macroeconomic issue of the short run and what is the key macroeconomic issue of the long run?
What will be an ideal response?
Jennifer has just finished high school and is deciding whether to start working or go to college. She has already been offered a job that pays $35,000 a year. Four years of college will cost $12,000 each year. She would earn an extra $20,000 each year after she graduates for the 45 years she plans on working until she retires. Jennifer should invest in college when the net present value of that investment is ______ and the internal rate of return is ______ the current interest rate.
A. positive; greater than B. negative; greater than C. positive; less than D. negative; less than
If at current exchange rates it was cheaper to buy a product in country B than country A, we would expect people to sell country A's currency and buy country B's currency, according to the purchasing power parity theory
a. True b. False Indicate whether the statement is true or false
Which statement explains why monopolists are not productively efficient?
a. Monopolists do not produce at the minimum of the average cost curve. b. Monopolists produce at the quantity where P = MC. c. Monopolists spend too much on developing innovative products. d. Monopolists produce too many goods at a lower average cost.