Classical growth theory states that
A) growth is maximized when everyone is fully employed.
B) growth is followed by increases in the population, eventually leaving real GDP per person unchanged.
C) growth in real GDP per person is difficult in the beginning but easier in the later stages.
D) advances in technology will always insure a permanent increase in real GDP per person.
B
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If the opportunity cost is 2X = 1Y for country A and 1/3X = 1Y for country B, then a possible terms of trade is:
A) 1X=1Y. B) 1X=4Y. C) 1X=5Y. D) 3X=1Y.
If the marginal cost curve is below the average variable cost curve, then
A) average variable cost is increasing. B) marginal cost must be decreasing. C) average variable cost could either be increasing or decreasing. D) average variable cost is decreasing.