Real GDP measures:
What will be an ideal response?
current output at base year prices
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In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage. One reasons for this is
A) some countries have more resources than other countries. B) production of most goods involves increasing opportunity costs. C) tastes for many traded goods are similar in many countries because of globalization. D) comparative advantage works better in theory than in practice.
Political stability is not a prerequisite to economic growth
Indicate whether the statement is true or false
A zero pollution level is not achievable because
A) corporations would lobby against it. B) it implies no production and no consumption. C) it implies an output level larger than that from a competitive market equilibrium. D) consumption would be larger than production.
Suppose that an economy grows by 4 percent, total factor productivity grows by 3 percent, and the labor force increases by 6 percent. If labor and capital are the only inputs and labor contributes 40 percent to GDP, then the stock of capital must have _____
a. fallen by 5% b. fallen by 3.33% c. fallen by 2.33% d. risen by 3% e. risen by 1.8%