Answer the following statements true (T) or false (F)
1) Between 1953 and 2011, rising labor productivity contributed more to U.S. economic growth than did increases in inputs.
2) Real GDP = worker-hours × labor productivity.
3) Labor productivity = worker-hours/real GDP.
4) Improvements in education and training explain about 80 percent of the historical growth of
U.S. labor productivity.
1) T
2) T
3) F
4) F
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Blueland is passing through a recession. How can the government of Blueland use fiscal policy to improve the economic condition of the country?
What will be an ideal response?
The price effect describes the:
A. decrease in the quantity of labor supplied in response to a higher wage. B. increase in the quantity of labor supplied in response to a lower wage. C. increase in the quantity of labor supplied in response to a higher wage. D. increase in the quantity of labor demanded in respond to a higher wage.
The rational expectations theory indicates that expansionary policy will:
a. stimulate real output in the long run but not in the short run. b. expand real output and employment if the public quickly anticipates the effects of the expansionary policy. c. equalize real and nominal interest rates during lengthy periods of inflation. d. fail to increase employment because individuals will anticipate it and take actions that will offset its impact.
Land on both sides of the border of Brazil and Venezuela has long been occupied by the Yanomamo people. These "fierce people" are the last Stone Age tribe left in South America. Following discovery of gold, approximately 45,000 garimperios (gold miners) invaded the Yanomamo territory. The mining process pollutes the rivers and scares away game, so traditional Yanomamo sources of food, are almost
impossible to find now. The Yanomamo are starving. Economists call this problem a. the cost disease. b. an externality. c. specialization. d. rent seeking.