Question

An article in the Gotham Times states that the stock of capital and the workforce in...

An article in the Gotham Times states that the stock of capital and the workforce in Gotham are both increasing at an annual rate of 5 percent. The same article states that real output is growing by 10 percent. This is possible in the long run because the economy is experiencing an increase in​ ____________.

A.

productivity growth.

B.

government spending.

C.

demand for goods and services.

D.

all of the above.

This is possible in the short run because​ ____________.

A.

more of the capacity is utilized.

B.

more of the existing capital stock is used.

C.

more of the labor force becomes employed.

D.

all of the above.

Homework Answers

Answer #1

If the stock of capital and the workforce in Gotham are both increasing at an annual rate of 5 percent but real output is growing by 10 percent, the reason for this could be -

1) In Long run, perhaps there is a growth in productivity function (most likely cause for output growth in long run)

Correct Ans - A

2) In the short run, real output growth can be explained by various factors like -

  • More utilization of capacity
  • More usage of existing capital stock
  • Increased employment of labor force

Correct Ans - D

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Per-worker production function shows the relationship between the amount of output per worker and capital...
The Per-worker production function shows the relationship between the amount of output per worker and capital per worker. This curve is not linear but increases at a decreasing rate. Why? If a worker has more and more capital, the additional capital will not be used as well as the previous capital, resulting in a smaller increase in output than previous units of capital. Too much capital will result in inefficient production If a worker has more capital, that worker will...
1?Basic factors of production available to a society are * A. natural resources, labor and capital....
1?Basic factors of production available to a society are * A. natural resources, labor and capital. * B. natural resources, labor and money. * C. labor, money and environment. * D. natural resources, money and infrastructure. 2?Total cost is * A. the sum of total fixed cost and total variable cost. * B. increasing with output. * C. equal to total fixed cost when production level is zero. * D. all the above true. 3?Suppose a certain firm is able...
Students Learn the Hard Way News Story In most states, tuition is going up in four-year...
Students Learn the Hard Way News Story In most states, tuition is going up in four-year public universities. Most are in the single digits, but some are huge - freshmen at Texas A&M will pay 26 percent more, University of Kansas students 21 percent, and University of South Carolina students 17 percent. The culprit is reduced state funding. The weaker economy has decreased tax revenues, and so states have cut spending to balance their budgets. Higher education is easier to...
21. Suppose the company E-bikes R US has isoquants that are straight lines or L-shaped. To...
21. Suppose the company E-bikes R US has isoquants that are straight lines or L-shaped. To cost minimize, E-bikes R US will A) not be able to minimize costs. B) find the lowest isocost line touching the relevant isoquant. C) find the highest isocost line touching the relevant isoquant. D) choose not to produce any output. 22. Suppose each mechanic must use only one wrench to fix the car, and wrenches are useless by themselves. In the long run, the...
1.Which of the following changes would most likely occur in the Gotham housing market if the...
1.Which of the following changes would most likely occur in the Gotham housing market if the city were to add a network of bike paths? a.The supply curve would fall. b.The supply curve would rise. c.The demand curve would fall. d.The demand curve would rise. 2.Which of the following changes would most likely occur in the Gotham housing market if the city were to require developers to pay a tax on each new building? a.The supply curve would fall. b.The...
answer the following questions Q21.When the economy experiences an expansion, it is most likely the case...
answer the following questions Q21.When the economy experiences an expansion, it is most likely the case that------------------------------- GDP is increasing, unemployment is increasing, and inflation is decreasing. GDP is increasing, unemployment is decreasing, and inflation is increasing. GDP is decreasing, unemployment is decreasing, and inflation is increasing. GDP is decreasing, unemployment is decreasing, and inflation is decreasing. Q22. GDP is an important economic measurement because it provides valuable data on unemployment rates measures the combined total of all intermediate and...
11. Richard loses his job at the railroad due to a downturn in general business conditions....
11. Richard loses his job at the railroad due to a downturn in general business conditions. He is experiencing a. structural unemployment. b. cyclical unemployment. c. seasonal unemployment. d. frictional unemployment. 12.   The reduction of structural unemployment in the United States' economy may require a. an increase in the minimum wage. b. a reduction in government spending. c. an decrease in interest rates. d. increased spending on worker retraining. 13.   Unemployment insurance has an important macroeconomic effect because it a....
31.   An increase in government spending of $200 million financed by a new tax of $200...
31.   An increase in government spending of $200 million financed by a new tax of $200 million in an economy with a marginal propensity to consume of .90 could result in an increase in nominal GDP (assuming a closed economy with no taxes or leakages) of up to how much? (a) $0; (b) $2,000 million; (c) $180 million; (d) $200 million. 32.   One important consequence of widened income and wealth disparities is a: (a) higher rate of inflation than would...
31. When inflation occurs, a. all families are spending more money on food b. all prices...
31. When inflation occurs, a. all families are spending more money on food b. all prices are rising c. oil prices are increasing d. the average level of prices is rising 34. The agent responsible for borrowing on behalf of the government when the budget is in deficit is a. the Treasury b. the Fed c. the Congress d. the Budget office 35. Which of the following best describes the meaning of a 5% rate of inflation? a. All prices...
1. True or False a) U.S. gross domestic product is measured by the dollar value of...
1. True or False a) U.S. gross domestic product is measured by the dollar value of all goods and services produced within the borders of the U.S. Output produced by foreigners (either workers or foreign-owned capital) is not included. b) An example of a final good is a natural resource like coal used to produce a good. c) Welfare benefits such as food stamps and health insurance coverage for the poor are not considered as part of government purchases in...