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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Use the following diagram to answer the next question.
Based on this diagram, we can say ________.
A. a contractionary policy is likely to be more effective than an expansionary policy B. the Fed is pursuing a contractionary monetary policy C. the Fed is pursuing an expansionary monetary policy D. an expansionary policy is likely to be more effect than a contractionary policy
Asymmetric information can exist before, but not after, a transaction.
Answer the following statement true (T) or false (F)
When a second firm enters a market, the original firm's profits decline because:
A. the original firm's price decreases. B. the original firm's ATC increases. C. the original firm's quantity decreases. D. All of these are correct.
When a person smokes a cigarette in his car and throws the butt out of the window, this is a(n)
A. marginal cost. B. internal benefit. C. external cost. D. marginal personal benefit.