Suppose That the Australian Economy Initially Uses 50 Billion Hours

question 134

Multiple Choice

Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP.If 50 billion more hours are employed and Australia's real GDP increases by $4 trillion more,

• A)Australia's production function exhibits diminishing returns.
• B)Australia's production function exhibits increasing returns.
• C)Australia has an Okun Wedge of $1 trillion.
• D)Australia has positive Lucas Wedge.
• E)Australia's production possibility frontier has a positive slope.

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Definitions:

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.