"There is a direct relationship between economic growth rates and the wealth of a nation." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. Wealthier nations often have smaller growth rates than poorer nations. Part of the reason is that a two percent growth rate for a rich nation means a lot more actual growth of the level of per capita real Gross Domestic Product (GDP) than it does for a poor nation.
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When manufacturing a car, parts must be soldered together. This work can be done by labor or by a robot (capital). More robots will be hired when the price of labor increases. This is known as
A) the effect of changing labor productivity. B) marginal revenue product. C) the complementary effect. D) the substitution effect.
Ceteris paribus, an increase in the price of a good will cause the
a. quantity demanded of the good to increase. b. quantity supplied of the good to decrease. c. consumer surplus derived from the good to decrease. d. demand of the good to increase.