In the market for factors of production, firms earn income by selling factors of production to households
Indicate whether the statement is true or false
FALSE
You might also like to view...
Refer to Figure 13-4. Given the economy is at point A in year 1, what is the difference between the actual growth rate in GDP in year 2 and the potential growth rate in GDP in year 2?
A) 0.3% B) 1.1% C) 2.7% D) 3.7%
When the Fed wishes to reduce the economy's money supply, it
a. lowers the discount rate b. lowers the legal reserve requirement c. reduces the margin requirement d. sells some of its government securities e. prints more money
For a long while, electricity producers were thought to be a classic example of a natural monopoly. People held this view because
a. the average cost of producing units of electricity by one producer in a specific region was lower than if the same quantity were produced by two or more producers in the same region. b. the average cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more produced in the same region. c. the marginal cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more producers in the same region. d. electricity is a special non-excludable good that could never be sold in a competitive market.
The catch-up effect says that countries with low income can grow faster than countries with higher income. However, in statistical studies that include many diverse countries we do not observe the catch-up-effect unless we control for other variables
that affect productivity. Considering the determinants of productivity, list and explain some things that would tend to prohibit or limit a poor country's ability to catch up with the rich ones.