Question

Please state true false or Uncertain. Please explain in 4 or more sentences on why you choose it:

1) If an economy experiences an improvement in the average level of it production technologies, then, in the long run, both GDP and GDP per worker will increase

2)Suppose you always use your credit card for purchases. Your credit card limit must then be thought of as part of your money holdings.

Answer 1

First statement is true and second statement is false

When there is an increase in the average production, production possibilities are increased so that the long run level of output is increased. This also increases the GDP per worker because the labour force remains unchanged.

Credit card cannot be represented as a part of money holdings because it is not money. It does not reflect the amount of money one person is holding because they are not a part of currency or deposits.