Answer the following statements true (T) or false (F)
1. A shift outward in the production possibilities curve is the direct result of improvements in the
efficiency factor of economic growth.
2. Total output for an economy is basically equal to total work-hours multiplied by labor productivity.
3. If an economy has 800,000 work-hours employed, and its labor productivity is $16/hour, then
its real GDP must be $50,000.
4. Since the 1950's, the U.S. average annual rate of growth of real GDP was higher than the
average annual growth of real GDP per capita.
5. Increased labor productivity has been less important as a source of growth than the increased
labor inputs in the U.S. economy since the 1950's.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5. FALSE
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What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?
a. The firm will go out of business. b. Consumers will substitute a rival's product. c. Consumers will boycott the product. d. The government will regulate the price.
From 1980 to 2014, the average annual growth rate for the Mexican economy has been 0.8 percent. Based on that growth rate and using the rule of 70, the number of years it will take real GDP per capita to double in Mexico is approximately
A) 9 years. B) 11 years. C) 56 years. D) 88 years.