Labor productivity is largely driven by investment in capital, technological progress, and human capital development. Business and government can increase labor productivity of workers by
direct investing in
or creating incentives for increases in technology and human or physical capital.
Which of the following will cause an increase in aggregate supply?
A shift in aggregate supply can be attributed to many variables, including changes in the size and quality of labor, technological innovations,
an increase in wages
, an increase in production costs, changes in producer taxes, and subsidies and changes in inflation.
Which of the following will most likely occur as a result of an increase in labor productivity?
Which of the following will most likely occur as a result of an increase in labor productivity?
Higher economic output and lower inflation
.
Which of the following would most likely result in an increase in aggregate demand?
Aggregate demand will increase as a result of an
increase in investment spending
. Aggregate demand will increase as a result of an increase in exports. Aggregate demand will not change, since consumer spending has not changed. Aggregate demand will not change, since investment spending has not changed.
What is the result of an increase in the money supply?
An increase in the supply of money typically
lowers interest rates
, which in turn, generates more investment and puts more money in the hands of consumers, thereby stimulating spending. Businesses respond by ordering more raw materials and increasing production.
What are the key factors that determine labor productivity?
The answer is pretty intuitive. The main determinants of labor productivity are
physical capital, human capital, and technological change
. These can also be viewed as key components of economic growth. Physical capital can be thought of as the tools workers have to work with.
What is the relationship between productivity and economic growth?
An economy's rate of productivity growth is
closely linked to the growth rate of its GDP per capita
, although the two are not identical. For example, if the percentage of the population who holds jobs in an economy increases, GDP per capita will increase but the productivity of individual workers may not be affected.
Which of the following would indicate that economic growth has occurred quizlet?
Which of the following would indicate that economic growth has occurred? The long run aggregate supply curve shifts to the right.
a decrease in aggregate supply
. Increase in which of the following is most likely to increase employment and promote long run economic growth?
What is sras curve?
The short-run aggregate supply curve (SRAS)
lets us capture how all of the firms in an economy respond to price stickiness
. When prices are sticky, the SRAS curve will slope upward. The SRAS curve shows that a higher price level leads to more output. There are two important things to note about SRAS.
What is the GDP formula?
The formula for calculating GDP with the expenditure approach is the following:
GDP = private consumption + gross private investment + government investment + government spending + (exports – imports)
.
Which of the following will result in cost-push inflation?
Cost-push inflation is when
supply costs rise or supply levels fall
. Either will drive up prices—as long as demand remains the same. Shortages or cost increases in labor, raw materials, and capital goods create cost-push inflation. These components of supply are also part of the four factors of production.
Which is an effect of stagflation quizlet?
Producers raise prices to continue to make a profit. What is one consequence of stagflation?
The economy drastically slows down as money loses its buying power
. a struggling economy because it results from a rise in production costs.
Which of the following is most likely the result of inflation?
Which of the following is the most likely result of inflation?
Consumers will switch to less expensive options for necessities
.
What is the result of an increase in the money supply quizlet?
increase. The short-run effect of an increase in the money supply is that
the aggregate price level: increases, and real output also increases
.
How does money supply increase in economy?
- Print more money – usually, this is done by the Central Bank, though in some countries governments can dictate the money supply. …
- Reducing interest rates. …
- Quantitative easing The Central Bank can also electronically create money. …
- Reduce the reserve ratio for lending.
Does an increase in the money supply cause inflation?
To summarize, the money supply is important because
if the money supply grows at a faster rate than the economy's ability to produce goods and services, then inflation will result
. Also, a money supply that does not grow fast enough can lead to decreases in production, leading to increases in unemployment.
