Per capita GDP will definitely fall when
A. The population growth rate exceeds the economic growth rate.
B. Population increases.
C. The labor force decreases.
D. GDP decreases.
Answer: A
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When an economy faces diminishing returns,
A) the slope of the per-worker production function becomes flatter as capital per hour worked increases. B) the per-worker production function shifts to the left. C) the per-worker production function shifts to the right. D) the slope of the per-worker production function becomes steeper as capital per hour worked increases.
A vector autoregression
A) is the ADL model with an AR process in the error term. B) is the same as a univariate autoregression. C) is a set of k time series regressions, in which the regressors are lagged values of all k series. D) involves errors that are autocorrelated but can be written in vector format.
If there is initially a federal budget deficit, and taxes fall while transfer payments rise: a. there is an indeterminate effect on both AD and the budget deficit. b. AD increases and the budget deficit increases
c. AD increases and the budget deficit decreases. d. AD decreases and the budget deficit increases.
Which of the following is the Fed's most common way to change the money supply?
a. Moral suasion b. The discount rate c. The required reserve rate d. Open market operations