"If country A has a higher level of real GDP per person than country B, then people in Country A must enjoy a higher standard of economic welfare than people in Country B." Is this statement true or false and explain your answer
What will be an ideal response?
The statement is false. Factors other than real GDP per person affect economic welfare. For instance, factors such as household production, underground production, leisure time, and environmental quality all affect economic welfare and all are omitted from real GDP per person. Although real GDP per person is an important factor in determining a country's economic welfare, it is not the only factor.
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The majority of evidence points to the fact that, in the last decade in the United States, labor productivity has
A) stayed the same. B) increased. C) decreased in the manufacturing sector but increased in the service sector. D) decreased.
Cost functions must be homogeneous of degree 1 in (input and output) prices.
Answer the following statement true (T) or false (F)
Contractionary monetary policy should be used if:
A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above.
Refer to Scenario 5.10. Hillary's indifference curves showing her preferences toward risk and return can be shown in a diagram. Expected return is plotted on the vertical axis and standard deviation of return on the horizontal axis
Although her indifference curves are upward sloping and bowed downward, their slope is very gradual (they are almost horizontal). These indifference curves reveal that Hillary is: A) risk neutral. B) risk averse. C) risk loving. D) irrational.