2 Which of the following changes does not cause an increase in the quantity of g

Question

2
Which of the following changes does not cause an increase in the quantity of goods and services that can be produced by one worker, or in one hour of work? OA an increase in the number of workers O B. an increase in the literacy rate O C technological change O D. an increase in the quantity of capital per hour worked Which of the following changes will ensure that an economy experiences sustained economic growth? O A technological change O B. Increasing the amount of capital OC. increasing the amount of raw materials O D. increasing the amount of labor

Explanation / Answer

Which of the following changes does not cause an increase in the quantity of goods and services that can be produced by one worker, or in one hour of work ?

Ans: A. An increase in the number of workers.

Explanations : An increase in the literacy rate can enhance the marginal productivity of a lobor which can lead to an increase in the quantity of goods and services that is produced by one worker. Technological change also can put differences in the productivity of lobor. An increase in the quantity of capital per worker can enhance production, produced by one worker. Increase in the number of workers also can increase the quantity of production but not the amount of production produced by one worker or in one hour of work.

Which of the following changes will ensure that an economy experience sustained economic growth?

Ans: A. Technological growth

Explanations: among the options, only technological advancement can help to use natural resource optimally through technological advancements. Other mentioned options can ruin the way of sustained economic growth.

Consider the following data for a closed economy:

Y= $12 trillion

C= $8 trillion

G= $2 trillion

Spublic = $ -0.50 trillion

T= $2 trillion

Now suppose that government purchases increases from $2trillion to $2.75 trillion but the value of Y and C are unchanged.

What must happen to te value of S and I ?

Ans: C. S increases by $0.75 trillion and I drops by $0.75 trillion.

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