Classical growth theory predicts
A) a slowdown in population growth over time.
B) sustained increases in economic growth in the long run.
C) sustained increases in the standard of living in the long run.
D) real GDP per person will remain at the subsistence level over time.
E) the population growth rate slows as real GDP per person rises.
D
You might also like to view...
Answer the following statement(s) true (T) or false (F)
1. A budget surplus occurs if the amount of government spending is greater than the amount of tax revenues during a fiscal year. 2. The term "full employment" means that the unemployment rate is equal to zero. 3. Contractionary policies stimulate the economy to grow. 4. If the European economy is booming and US exports increase, aggregate demand (AD) increases. 5. Efficiency wages, a Keynesian theory of unemployment, posits that wages higher than the equilibrium wage are a cause of unemployment.
The real business cycle theory is based on all of the assumptions below EXCEPT
A) flexible wages. B) flexible prices. C) pure competition. D) small menu costs.