Balanced growth occurs when
A) the economy is in steady state.
B) the growth rates for the capital-labor ratio and real GDP per worker are the same.
C) total factor productivity and capital accumulation each account for the same amount of growth in labor productivity.
D) nations converge to the same level of real GDP per worker from equal increases in total factor productivity.
B
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Joe is willing to pay $4 for his first slice of pizza and $3 for his second slice of pizza. If the price is $2, on his two slices of pizza Joe receives a total consumer surplus of
A) $4. B) $3. C) $2. D) $1.
Suppose the socially-optimal quantity of good x is 2,500 units and the market-equilibrium quantity of good x is 3,000 units. When 2,500 units of good x are produced, the
a. external cost of good x exceeds the private value of good x. b. external cost of good x equals the private value of good x. c. social cost of good x exceeds the private value of good x. d. social cost of good x equals the private value of good x.
The labor demand curve:
A. slopes up because of the law of demand. B. slopes down because of the law of demand. C. shifts out when wages fall. D. shifts in when wages rise.