Midterm II (ECON 2030)

Other things the same, a country that increases its saving rate increases

its future productivity and future real GDP.

​In order to promote growth in living standards, policymakers must

All of the above

Given that a country's real output has increased, in which of the following cases can we be sure that its productivity also has increased?

Both b and c are correct (The total number of hours worked stayed the same. The total number of hours worked fell.)

All else equal, if there are diminishing returns, then which of the following is true if a country increases its capital by one unit?

Output will rise but by less than it did when the previous unit was added.

Which of the following can explain faster growth of real GDP in country A than in Country B?

both greater population growth and greater productivity growth in Country A

In an economy where net exports are zero, if saving rises in some period, then in that period

consumption falls and investment rises.

"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount." This statement

is consistent with the view that capital is subject to diminishing returns.

A nation's standard of living is best measured by its

real GDP per person.