All of the Following Statements Are True Except

question 30

Multiple Choice

All of the following statements are true except

• A)the Lucas wedge arises from the slowdown of productivity growth that began during the 1970s.
• B)real GDP per person was $45,000 per year lower in 2016 than it would have been with no growth slowdown.
• C)the Lucas wedge accumulated to $790,000 per person by 2016.
• D)the Lucas wedge equals real GDP minus potential GDP.
• E)the Lucas wedge is the dollar value of the accumulated gap between what real GDP per person would have been if the 1960s growth rate had persisted and what real GDP per person turned out to be.

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Definitions:

Novation

The act of replacing an old contract with a new one, substituting a new party into an existing agreement.

Mortgage

A legal agreement by which a bank or creditor lends money at interest in exchange for taking title of the debtor's property, with a clause for voiding the agreement upon repayment.

Discharged

In legal terms, released or freed from an obligation, duty, or liability.

Incidental Beneficiary

A third party who may benefit from a contract between two other parties, albeit unintentionally and without the legal right to enforce the contract terms.