What is human capital? How do workers acquire human capital, and how does the acquisition of human capital influence total factor productivity and labor productivity?
What will be an ideal response?
Human capital is the accumulated knowledge and skills that workers acquire from education and training or from life experiences. Workers acquire human capital in two basic ways: going to school for formal training to learn basic skills that are useful in the workplace, and through learning by doing, which refers to improving productivity by repeatedly performing a task. The more human capital that workers acquire, the more productive the workers become, which increases total factor productivity and labor productivity.
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Which of the following is false?
a. If people can anticipate the plans of policy makers and alter their behavior quickly, their behavior could neutralize the intended impact of government action on real GDP. b. The theory of rational expectations leads to optimistic conclusions regarding macroeconomic policy's ability to achieve its intended economic goals. c. Rational expectation economists believe that wages and prices are flexible, and that workers and consumers incorporate the likely consequences of government policy changes quickly into their expectations. d. Catching consumers and businessmen off-guard with macroeconomic policy changes gets harder the more you try to do it.
Improvements in the level of technology will generally shift the production function downward.
Answer the following statement true (T) or false (F)