The smaller the percentage of people who work, the
A. lower the actual output per capita.
B. lower the potential output per capita.
C. higher the actual output per capita.
D. higher the potential output per capita.
Answer: B
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Which is essential to economic growth, whether in Latin America, sub-Saharan Africa, Asia, Europe, or North America?
A) Limits on the use of non-renewable resources B) International aid C) The rule of law D) An effective system of trade tariffs and quotas E) The evolution of a single world currency
Suppose that the money wage in the economy increases by 8 percent. As a result the
A) long-run aggregate supply will decrease. B) long-run and the short-run aggregate supply both decrease. C) short-run aggregate supply will decrease. D) long-run aggregate supply will increase and the short-run aggregate supply will decrease.
What is an economic model?
A) It is a simplified version of some aspect of economic life used to analyze an economic issue. B) It is a description of an economic issue that includes all possible related information. C) It is a detailed version of some aspect of economic life used to analyze an economic issue. D) It is a description of an economic issue based on official government information.
A hypothetical open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7 . Assume that the economy is initially in equilibrium. What is the spending multiplier of this economy?
a. 2 b. 1.4 c. 0.7 d. 0.9 e. Cannot be determined with the given information