Between 1960 and 2017 U.S. GDP, measured in dollars of constant purchasing power, expanded by a factor of 5. However, the standard of living only increased by 3 times over this period. Explain the difference.
What will be an ideal response?
GDP growth includes the effects of inflation and population growth, meaning there are more labor inputs in the economy. The standard of living is better measured by real GDP per capita. To obtain the standard of living from GDP, one must correct for the effect of population growth.
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The production of steel in a factory generates a negative externality. A per-unit tax on the factory that equals ________ of steel production will internalize the externality entirely
A) the marginal private cost B) the marginal social cost C) the marginal external cost D) the marginal external benefit
If enforcement is aimed at buyers of an illegal good, the result will be
A) an increase in the short-run supply of the good. B) a decrease in the short-run supply of the good. C) a decrease in demand for the good. D) an increase in the price of the good.
The tastes for foreign goods and services generally has a ________ relationship with aggregate expenditure.
A. positive B. constant C. negative D. skewed
Given: 80 million employed; 20 million unemployed; 10 million collecting unemployment insurance benefits; 10 million discouraged workers. Find: (1) the number of people in the labor force; (2) the unemployment rate.
What will be an ideal response?