What are the primary sources of economic growth? Why are our real incomes and living standards today so much higher than those of our great grandparents 50 or 100 years ago? Why is the income per person so much higher in some countries than others?
The major sources of economic growth are gains from trade, discovery of new products and better ways of doing things, and capital formation. Trade makes gains from division of labor and economies of scale possible. Discovery and development of improved technologies and products help people produce more and achieve higher income levels. Investment in physical Capital provides machines, tools, and structures that will make it possible to generate more output in the future. These three factors are the major reason why our output and income levels are so much higher than those of our great grandparents 50 or 100 years ago. They are also the reason why the income levels of some countries are so much higher than others.
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A) raise the price of the good. B) generate tax revenue for the government. C) stimulate international trade. D) help domestic producers. E) are paid by foreign producers.
In the rational expectations model, only unexpected or unpredictable changes cause unemployment to deviate from its natural rate
a. True b. False Indicate whether the statement is true or false