How has improved resource allocation stimulated economic growth?
What will be an ideal response?
Improved resource allocation means that workers and resources are moved from low productivity areas to high productivity areas. In terms of workers, the movement has historically been from low productivity agricultural jobs to higher productivity manufacturing jobs, and now to even higher productivity software engineering, business consulting, and pharmaceutical jobs. Also, less discrimination in education and jobs has allowed women and minorities to gain higher productivity jobs, improving the overall productivity of the labor force. This is one way better resource allocation can lead to economic growth.
Tariffs, quotas and other trade barriers hinder resource allocation in international trade. However, the recent movement towards opening trade through international agreements has improved resource allocation and labor productivity, and has expanded output across the world.
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Last year the price level increased from 118 to 122. The increase in the price level leads to a decrease in
A) potential GDP. B) the money wage rate. C) the buying power of money. D) the real interest rate. E) the price of domestic goods and services relative to foreign goods and services.
The above table shows answers given by people interviewed in a government survey of households. Which individuals are considered to be a part of the labor force?
A) C and D B) B, C, and D C) A, C, and D D) A, B, and C
Suppose that with international trade now a possibility, two trading nations restructure their production from both having produced clothes and food to one producing clothes and the other producing food. What gains do they experience? What problems may they experience? a. Gains are higher labor productivity and greater total output. Problems may be economic inefficiency
b. Gains are economic efficiency. Problems may be trade wars. c. Gains are people in both nations having higher incomes. Problems may be that the nations cannot find an acceptable trading price between food and clothes. d. Gains are higher labor productivity and greater total output. Problems may arise from dependence on the other for vital goods. e. Gains are economic efficiency. There are no problems as long as they engage in free trade.
Many ____________________would have gone out of business without subsidies
Fill in the blank(s) with the appropriate word(s).