At an annual growth rate of 2 percent, approximately how long does it take for real GDP per capita to increase from $30,000 to $60,000 in a country?:
A) 15 years
B) 25 years
C) 35 years
D) 45 years
Ans: C) 35 years
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Suppose that, for every 1 percentage point decline in the discount rate, commercial banks collectively borrow an additional $2 billion from Federal Reserve Banks. Also assume that the reserve requirement is 10%. If the Fed lowers the discount rate from 4.0% to 3.5%, bank reserves will ________.
A. increase by $1 billion and the money supply will increase by $10 billion B. decline by $1 billion and the money supply will decline by $10 billion C. increase by $1 billion and the money supply will increase by $5 billion D. increase by $10 billion and the money supply will increase by $100 billion
Division of labor means that
A. the production process is divided into smaller tasks. B. some employees join labor unions and others do not. C. management and labor are always in conflict. D. the labor market in the United States is geographically segmented.
An emission charge
a. takes advantage of firms’ natural profit incentive b. cannot achieve a least-cost solution c. offers no revenue stream to governments d. has no effect on product pricing