An Increase in the Productivity Will ________ Potential GDP,________ Employment,and

question 16

Multiple Choice

An increase in the productivity will ________ potential GDP,________ employment,and ________ the real wage.

• A) decrease; increase; raise
• B) increase; increase; raise
• C) increase; decrease; lower
• D) increase; increase; lower

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Definitions:

Government Expenditures

The total amount spent by the government for its operations, public services, and social welfare programs.

Aggregate Spending

The total spending on goods and services in an economy at a given overall price level and in a given time period.

Marginal Propensity

The ratio of change in an economic variable, such as consumption or saving, to a change in another, like income.

Consumption Spending

The total amount of money spent by households and consumers on durable goods, nondurable goods, and services.