Real GDP is $700 billion, average hours worked per week is 42 and aggregate hours 150 billion hours. What is the economy's labor productivity?
A) $1.80 per hour
B) $3.75 per hour
C) $16.67 per hour
D) $46.67 per hour
E) $4.50 per hour
D
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Potential output in an economy decreases as the supply of labor decreases or the capital stock increases
Indicate whether the statement is true or false
The law of one price (LOOP) indicates that:
a. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits. b. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country. c. The quantity produced of a good in one country should be equal to the exchange-rate-adjusted quantity produced of the same product in another country. d. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country. e. All the above.