Consider two countries: A and B. In country A, the annual growth rate of GDP per capita is 2%, while in country B the annual growth rate of GDP per capita is 6%. At present, country B's GDP per capita is higher than country A's GDP per capita
Which of the following statements will then be true?
A) The gap between country A's GDP per capita and country B's GDP per capita will decrease for the first few years and then will increase later.
B) The gap between country A's GDP per capita and country B's per capita will decrease over time.
C) The gap between country A's GDP per capita and country B's per capita will widen over time.
D) The gap between country A's GDP per capita and country B's per capita will remain the same.
C
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Joe owns a small coffee shop, and his production function is q = 3KL where q is total output in cups per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor)
If Joe's capital is currently fixed at K=3 machines, what is his short-run production function? A) q = 3L B) q = 3L2 C) q = 9L D) q = 3K2
Which of the following would cause a rightward shift in the labor demand curve?
a. A rise in the demand for leisure hours. b. A rise in the wage rate. c. A rise in workers' marginal productivity. d. A decline in workers' nonlabor incomes.
Positive statements are not
a. descriptive. b. prescriptive. c. claims about how the world is. d. made by economists speaking as scientists.