Suppose That an Economy Grows by 6 Percent, Total Factor

question 73

Multiple Choice

Suppose that an economy grows by 6 percent, total factor productivity grows by 4 percent, and the capital stock increases by 2 percent.If labor and capital are the only inputs used in production and capital contributes 25 percent to GDP, then the labor force has risen by _____.

• A)1.5 %
• B)2%
• C)4%
• D)6%
• E)8%

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Definitions:

Upward-Sloping

Describes a line or curve on a graph that increases in height as it moves from left to right, often used to represent the increase in price with an increase in quantity supplied.

Marginal Cost Curve

A graphical representation showing how the cost of producing one more unit of a good changes as the production volume is increased.

Short-Run Supply

The total quantity of goods and services that producers are willing and able to sell at a given price in the short term, considering some inputs as fixed.

U-Shaped

Describes the shape of certain graphs, such as average cost curves in economics, indicating a period of declining costs followed by increasing costs as output rises.