Real GDP per person in Richland is $20,000, while real GDP per person in Poorland is $10,000. However, Richland's real GDP per person is growing at 1 percent per year, and Poorland's real GDP per person is growing at 3 percent per year. After 50 years, real GDP per person in Richland minus real GDP in Poorland is:
A. positive and greater than $10,000.
B. negative.
C. zero.
D. positive but less than $10,000.
Answer: B
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Because people can borrow when they are young, the life cycle theory would suggest that one's standard of living depends on
a. lifetime income rather than annual income. b. aggregate income rather than annual personal income. c. annual extended-family income rather than annual personal income. d. income averaged across seasons rather than across years.
Ceteris paribus means:
A) allowing all other things to change. B) making value judgments. C) all other things unchanged. D) differentiating between macroeconomics and microeconomics.
The MPC indicates the fraction of
A. An additional dollar of disposable income that will be spent. B. An additional dollar of disposable income that will be saved. C. Total income that will be saved. D. Total income that will be spent.
Give at least three reasons why U.S. workers supply so much more labor than workers in France and other rich leader countries.
What will be an ideal response?