Refer to Figure 11-2. Based on the per-worker production function above, if the economy raises capital per hour worked from $35,000 to $40,000, by how much will real GDP per hour worked increase?
A) $150 B) $1,850 C) $2,000 D) $5,000
A
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When the price of toothpaste increases by 15 percent, the quantity of toothpaste demanded falls by 30 percent. Calculate the price elasticity of demand. Is the demand for toothpaste elastic, inelastic, or unit elastic?
What will be an ideal response?
Moral hazard can be avoided by:
A. employers monitoring employee effort. B. removing the asymmetric information. C. employers incentivizing employees to maintain consistent effort. D. All of these statements are true.
Black-market prices are below equilibrium prices because sellers want to sell large quantities
a. True b. False Indicate whether the statement is true or false
Suppose that an expansionary gap of $500 billion exists in the economy, and the marginal propensity to consume is 0.8 . Which of the following correctly describes a discretionary fiscal policy that will be just sufficient to close this expansionary gap?
a. Increase government spending by $250 billion. b. Increase taxes by $125 billion. c. Decrease government spending by $250 billion. d. Decrease taxes by $125 billion.