Suppose there are two economies, Alpha and Beta, which have the same production possibilities curves. If Beta devotes more resources to produce capital goods than consumer goods as compared to Alpha, then in the future:
A. Alpha will experience greater economic growth than Beta
B. Beta will experience greater economic growth than Alpha
C. Alpha will not be able to achieve full employment or productive efficiency
D. Beta will not be able to achieve full employment or productive efficiency
Answer: B
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Suppose a new technology is developed that increases the productivity of labor. You would expect
A. the wage rate to fall, since employers will want less labor. B. the demand for labor to fall. C. the demand for labor to rise. D. an increase in unemployment as firms replace labor with technology.
The current-dollar GDP can be converted into a constant-dollar GDP by
a. adding a price index. b. subtracting a price index. c. multiplying by a price index. d. dividing by a price index.
Most entrepreneurs do not have enough money of their own to start their businesses. When they acquire the necessary funds from someone else,
a. their consumption expenditures are being financed by someone else's saving. b. their consumption expenditures are being financed by someone else's investment. c. their investments are being financed by someone else's saving. d. their saving is being financed by someone else's investment.
A decrease in the rate of inflation will increase the rate of unemployment.
Answer the following statement true (T) or false (F)