The growth rate of real GDP in the United States rises from 4.2% to 4.4%. Explain and calculate how this increase in the growth rate of real GDP affects the number of years it will take for real GDP to double
What will be an ideal response?
The "Rule of 70" states that the number of years it takes for GDP to double is equal to 70 divided by the growth rate of real GDP. Given this formula, at a growth rate of 4.2%, it will take 70/4.2 = 16.67 years for GDP to double. If the growth rate increases by two-tenths of a percent (to 4.4%), the number of years it will take for GDP to double will decrease to 70/4.4 = 15.9 years.
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When oligopolistic firms collude to maximize their joint profits, in comparison with the situation in competitive markets, their actions generally lead to
a. a larger output and lower prices. b. a smaller output and higher prices. c. a smaller output and lower prices. d. the same output and higher prices.
When a monopolistically competitive firm is in long-run equilibrium,
a. marginal revenue is equal to marginal cost. b. average total cost is minimized. c. marginal revenue is tangent to average total cost. d. All of the above are correct.
For most of the 19th century in the American West, there was
A. an abundance of labor relative to land. B. abundance of land relative to labor. C. an abundance of both labor and land. D. a scarcity of both labor and land.
Which of the following relations is the slope along a given isoquant?
A. 0 = {?F(K,L)/?L} dK + {?F(K,L)/?K} dL B. dQ = {?F(K,L)/?K} dL + {?F(K,L)/?L} dK, where dQ > 0 C. 0 = {?F(K,L)/?L} dK + {?F(K,L)/?L} dL D. dQ = {?F(K,L)/?K} dK + {?F(K,L)/?L} dL, where dQ > 0