What are the effects of an increase in labor productivity on potential GDP, the quantity of labor, the real wage rate, and potential GDP per hour of labor?
What will be an ideal response?
The increase in labor productivity shifts the aggregate production function curve upward. The demand for labor increases, and the demand for labor curve shifts rightward. The increase in the demand for labor raises the real wage rate and increases employment. The increase in employment as well as the upward shift of the aggregate production function increase potential GDP. Potential GDP per hour of labor increases.
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An intermediate good is
A) always counted when measuring GDP because it doesn't represent time spent in production of a final good or service. B) a good whose value is of neither a high grade nor a low grade. C) a good that is sold to the government and then redistributed to the poor. D) any good that is resold by its purchaser rather than used as is.
Collaborative research is especially important in high-technology sectors because a single firm might not have the resources to develop a significant innovation
a. True b. False Indicate whether the statement is true or false