Chapter 6 - 1022B004

Choose the correct statement about economic growth and a business cycle expansion.

• A return to full employment in a business cycle expansion is shown as a movement from inside the PPF to a point on the PPF.

• Economic growth is illustrated as a movement along the

  PPF.

• The return to full employment in an expansion phase of the business cycle is economic growth.

The aggregate production function is a relationship that tells us how​ _____ changes as the quantity of​ _____ changes when all other influences on production remain the same.

• real​ GDP; labour

• capital; labour

• ​output; investment

• real​ GDP; capital

The sources of economic growth are​ _______.

• work hours growth and full employment

• work hours growth and labour productivity growth

• labour productivity growth and incentives

• incentives and full employment

If real GDP per person doubles in 20​ years, then the annual growth rate of real GDP per person is​ ______ percent a year.

Answer explanation

3.5 percent

If real GDP is​ $1,000,000, exports are​ $200,000, imports are​ $300,000, and aggregate labour hours are​ 100,000, labour productivity is​ $__ per hour.

Answer explanation

$10 per hour