Which of the following statements is likely to be made by someone who believes in the new growth theory?
A) Population growth will limit long-run gains in real GDP per person.
B) Competition will encourage discoveries of new ideas leading to greater economic growth.
C) Choices made by human capital are likely to be inefficient.
D) Economic growth will eventually slow.
E) Although technological changes increase real GDP, these changes are random and unexplainable.
B
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According to the circular flow, the value of total output produced and total income
A) will be equal. B) should increase by the unanticipated rate of inflation. C) should differ by the value of intermediate goods. D) will always be increasing in a capitalist economy.
If all factors of production that are available for use under current market conditions are being utilized, then the economy has:
A) economic growth. B) comparative advantage. C) full employment. D) inefficient production.