Suppose That in Ireland Total Annual Output Is Worth $600

question 308

Multiple Choice

Suppose that in Ireland total annual output is worth $600 million and people work 30 million hours.In Canada total annual output is worth $800 million and people work 50 million hours.Productivity is higher

• A) in Ireland. Most variation in the standard of living across countries is due to differences in productivity.
• B) in Ireland. Differences in productivity explain very little of the variation in the standard of living across countries.
• C) in Canada. Most variation in the standard of living across countries is due to differences in productivity.
• D) in Canada. Differences in productivity explain very little of the variation in the standard of living across countries.

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Definitions:

Real Rate of Return

The rate of profit or growth rate after adjusting for inflation.

Nominal Rate

The interest rate before adjustments for inflation, as opposed to the real rate, which is adjusted for inflation.

Inflation

How quickly the average price of goods and services elevates, lessening the power to purchase.

APR

Annual Percentage Rate, the annual rate charged for borrowing or earned through an investment, which includes all fees and costs associated with the transaction.