What factors increase potential GDP? Include a definition of potential GDP in your answer
What will be an ideal response?
Potential GDP is the level of GDP attained when all firms are producing at capacity. Growth in potential GDP is determined by growth in the labor force and the capital stock and by technological change. Capital investments accompany growth in the labor force, encouraging technological progress and increasing potential GDP.
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A rise in government expenditure __________ the natural rate of interest
A) lowers B) raises C) has no effect on D) has an uncertain effect on
Equilibrium real GDP is
a. independent of the price level b. determined solely in the loanable funds market c. controlled by the Fed d. directly related to the interest rate e. the level of output at which total spending equals total output for a given price level
A labor contract provides for a first-year wage of $10 per hour, and specifies that the real wage will rise by 3 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.07 in the second year. What dollar wage must be paid in the second year?
A. $11.02 B. $10.70 C. $10.90 D. $10.30
Tasty Chicken Inc. has worked hard to develop its brand name. Its motto "Absolutely Tasty" has become a common term used for good food. But the company finds that grocery stores do not feature their products in high visibility areas. Further, restaurants never tell their patrons they are eating food manufactured by Tasty Chicken. What needs to be done?
What will be an ideal response?