Why do purely technological theories have difficulty explaining recessions in which real GDP falls?
What will be an ideal response?
Although the rate of technological progress is at the root of long-run variation in economic growth and technological breakthroughs could cause a rapid increase in a particular industry's output, purely technological theories have difficulty explaining recessions in which real GDP falls. This is because a "technological regress," in which the technological capabilities of an economy deteriorate, seems an unlikely explanation for recessions. It is hard to imagine, for example, that a negative technology shock caused the Great Depression.
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If the nominal interest rate is greater than the real interest rate,
A) it is an indication of economic growth. B) inflation must be occurring. C) lenders must lose because they can only make loans using the real interest rate. D) the real interest rate must be negative. E) None of the above answers is correct because it is not possible for the nominal interest rate to exceed the real interest rate.
In Karl Marx's view, people under the ideal state of communism would be motivated by the principle "from each according to his ability, to each according to his enterprise."
a. True b. False Indicate whether the statement is true or false
There is uncertainty about the precise level of the natural rate of unemployment
a. True b. False
One big difference between tariffs and quotas is that tariffs
a. raise the price of a good while quotas lower it b. generate tax revenues while quotas do not c. stimulate international trade while quotas inhibit it d. hurt domestic producers while quotas help them e. generate the same outcome as free trade while quotas do not