The standard of living rises at a slower pace than labor productivity if
A) n = q.
B) n < q.
C) n > q.
D) The standard of living is not affected by the relative size of n and q.
B
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Suppose the price level is unchanged and real GDP rises. Then
A) nominal GDP must decrease. B) nominal GDP must remain unchanged. C) nominal GDP must increase. D) none of the above are true.
According to Ricardian equivalence, the key consequence of an increase in the budget deficit that arises from a tax cut is ________
A) a decrease in private investment B) an increase in inflation C) an increase in the public's holding of government bonds D) an increase in the supply of money
Assume a firm is run as a zero-profit enterprise. Which of the following would be true?
A) There is a higher probability that wage reductions would outweigh layoffs. B) Those in charge would not act any different than regular owners, there would still be layoffs. C) Those not in charge would remain risk neutral. D) Wage reductions would be lower than they would be if the firm was run for profit.
An implication of the Employment Act of 1946 is that the government should respond to changes in the private economy to stabilize aggregate demand
a. True b. False Indicate whether the statement is true or false