Real GDP per capita:
A. cannot grow more rapidly than real GDP.
B. cannot grow more slowly than real GDP.
C. necessarily grows more rapidly than real GDP.
D. can grow either more slowly or more rapidly than real GDP.
Ans: D. can grow either more slowly or more rapidly than real GDP.
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If the Fed has announced that it plans on lowering the interest rate it will
A) engage in contractionary open market operations, thereby increasing the money supply. B) engage in contractionary open market operations, thereby decreasing the money supply. C) engage in expansionary open market operations, thereby decreasing the money supply. D) engage in expansionary open market operations, thereby increasing the money supply.
Should countries specialize in producing goods and services based on having a comparative advantage or an absolute advantage? Why?
What will be an ideal response?