The Growth Rate of Potential GDP Is the Sum of Two

question 179

Multiple Choice

The growth rate of potential GDP is the sum of two other growth rates.These other growth rates are

• A)population and resource base.
• B)goods output and services output.
• C)labor input and labor hours worked.
• D)labor input and labor productivity.

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Definitions:

Standard Deviation

A statistical measure that quantifies the variation or spread of a set of numbers from its average, used to gauge volatility.

Risk-Free Asset

An investment that is expected to deliver its return with certainty, with government bonds often considered as the closest example.

Risky Portfolio

An investment portfolio that contains assets with higher volatility and potential for significant variations in returns, offering the possibility of higher gains at the risk of greater losses.

Expected Rate of Return

The average return that an investor anticipates to earn on an investment, considering all potential outcomes and their probabilities.