What are the factors that contribute to productivity growth in the market economy and which of them is considered most important?
What will be an ideal response?
There are three oft-cited factors that contribute to productivity growth. The first is the education and experience of the labor force that enables workers to produce more and better goods in a given period of time. The second is investment in plant and equipment that gives workers more and better tools to do their work with. The third is innovation—the discovery and introduction of new production methods and new products that increase the productivity of workers. Innovation is considered the most important of these three factors. Competition between firms in terms of innovation is considered to be the main engine of growth in the market economy.
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To eliminate a recessionary gap, the government can ________ government expenditures on goods and services or ________ taxes
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) increase; not change
Suppose the AC curve is U-shaped. Then an increase in a recurring fixed cost will cause the AC curve to shift up, with its lowest point shifting to the right.
Answer the following statement true (T) or false (F)
Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. If Leo earns $150, then he will receive ________ in total benefits from the two programs.
A. $225. B. $75. C. $325. D. 0.
If the government increased its purchases of goods and services by $12,000, and this resulted in an eventual increase in GDP and income of $60,000, the MPS would be equal to:
A. 0.2. B. 0.4. C. 0.8. D. 2.