What are the effects of an increase in labor productivity on potential GDP, the quantity of labor, the real wage rate, and potential GDP per hour of labor?
What will be an ideal response?
The increase in labor productivity shifts the aggregate production function curve upward. The demand for labor increases, and the demand for labor curve shifts rightward. The increase in the demand for labor raises the real wage rate and increases employment. The increase in employment as well as the upward shift of the aggregate production function increase potential GDP. Potential GDP per hour of labor increases.
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Intermediate goods and services are one of the largest components of the expenditure approach to measuring GDP
Indicate whether the statement is true or false
What is meant by the term "free market"?
What will be an ideal response?
Which of the following $5,000 face-value securities has the highest yield to maturity?
A) a 6 percent coupon bond selling for $5,000 B) a 6 percent coupon bond selling for $5,500 C) a 10 percent coupon bond selling for $5,000 D) a 12 percent coupon bond selling for $4,500
Suppose your donut shop earns $20,000 in total revenues per month with explicit costs of $15,000 and opportunity costs of $5,000. Your economic profit is
A) $16,000. B) $12,000. C) $5,000. D) zero.