Suppose an economy is in a steady state, then its saving rate falls, once and permanently. As the economy approaches its new long-run steady state, consumption per worker is ________
A) falling
B) rising
C) unaffected
D) either rising or falling
A
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An inward shift of the production possibilities curve
A. represents an economic decline. B. means that the previous levels of production are now unobtainable except under unusual circumstances such as war. C. means that the economy can produce more of both goods. D. represents an economic decline AND means that the previous levels of production are now unobtainable except under unusual circumstances such as war.
If the expenditure schedule must be shifted upward to reach potential GDP, then the economy is experiencing a(n)
a. inflationary gap. b. precautionary gap. c. recessionary gap. d. expansionary gap.
The purchase of a firm in another country that involves the taking of management responsibility is referred to as _____
a. portfolio investment b. foreign direct investment c. purchasing power parity d. open account trading
Suppose an influenza pandemic were to significantly decrease the population of a country. We would predict a decrease in the marginal product of land in that country
a. True b. False Indicate whether the statement is true or false