Scenario: Red Country and Purple Country Have Identical Aggregate Production

question 111

Multiple Choice

Scenario: Red Country and Purple Country have identical aggregate production functions. The amount of physical capital stock available to each country is equal. Labor supply in Red Country is HR, while the labor supply in Purple Country is HP.

-Refer to the scenario above.As inventors in Purple Country develop and implement new software that helps all citizens complete their work faster,total output in Purple Country will ________.

• A) increase slower than in Red Country
• B) move closer or even surpass HR
• C) increase, because inputs can be used more efficiently
• D) remain the same if physical capital stock is held constant

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Definitions:

Thoughts

Mental processes involving reasoning, reflection, and contemplation, often part of conscious mental activities.

Canadian Psychological Association

The primary national organization for the science, practice, and education of psychology in Canada.

Psychology

The scientific study of the mind and behavior, including understanding mental functions, brain activities, and social interactions.

Canada

A country located in the northern part of North America, known for its multicultural population, bilingual French-English heritage, and vast natural landscapes.