The Aggregate Production Function Relating Real GDP to Labor Hours

question 202

Multiple Choice

The aggregate production function relating real GDP to labor hours

• A) has a constant slope.
• B) has a negative slope.
• C) has a positive slope and becomes steeper as employment increases.
• D) has a positive slope and becomes less steep as employment increases.

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Definitions:

Louis Thurstone

An influential American psychologist known for his contributions to psychometrics, including factor analysis and the development of psychological scales.

Anchoring

A cognitive bias where an individual relies too heavily on an initial piece of information (anchor) when making decisions.

Adjustment Heuristic

A rule of thumb where an initial estimate is adjusted based on additional information or analysis.

Cognitive Bias

A systematic pattern of deviation from norm or rationality in judgment, where inferences about other people and situations may be drawn in an illogical fashion.