Some of our farm fields are being left unused. Does this have any implications for the economy's PPF diagram (with agricultural products on one axis and all other products on the other axis)?
What will be an ideal response?
With unemployed resources, we are at a point below (inside) the PPF.
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Classical growth theory argues that when real GDP per person rises above the subsistence level
A) technological change slows down, stagnating the economy. B) population growth increases, driving real GDP per person back to subsistence level. C) people don't want to work as much, decreasing labor supply. D) the economy enjoys a period of permanent growth.
Government expenditures are considered autonomous in the model meaning that changes are the result of:
A) changes in real income. B) changes in inflation. C) changes in unemployment. D) changes in policy decisions.
At a boundary choice:
A. the consumer purchases at least some of every good. B. the consumer purchases no goods. C. the consumer does not spend all of her income. D. the consumer purchases some of at least one good but none of at least one other good.
Which of the following is a correct way to measure productivity?
a. Divide the number of hours worked by the quantity of output. b. Divide the quantity of output by the number of hours worked. c. Determine how much output is produced in a given time. d. Determine how much time it takes to produce a unit of output.