While studying with your friend, your friend states, "Our leisure time increases GDP but lowers our standard of living because it reduces the amount of goods and services we can consume." Is your friend's statement correct?
What will be an ideal response?
Your friend's assertion is incorrect on two counts. First, leisure time does not increase GDP. Indeed, by taking time away from production, leisure time decreases GDP. Second, leisure time increases our standard of living. People enjoy their leisure time and therefore having more leisure time raises their standard of living.
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The production possibilities curve marks the boundary between attainable and unattainable combinations of output
a. True b. False Indicate whether the statement is true or false
The aggregate demand curve
a. is a horizontal line if the economy is perfectly competitive b. depicts the economy's equilibrium output level at each possible price level c. depicts the economy's equilibrium output at each possible interest rate d. shifts whenever the price level changes e. can slope upward if the Fed changes the money supply