Over the Long Run, Real Earnings Per Worker Can Increase

question 27

Multiple Choice

Over the long run, real earnings per worker can increase only at about the same rate as the economy's rate of growth of

• A) total output.
• B) stock of capital.
• C) output per worker.
• D) international trade.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time due to use and wear and tear.

Units-Of-Production

A depreciation method that allocates expense based on the actual usage or production levels of an asset.

Double-Declining-Balance

A method of accelerated depreciation that doubles the straight-line depreciation rate, reducing the asset's book value more quickly in the early years of its life.

Straight-Line Method

A method of calculating the depreciation of an asset where the asset's cost is evenly spread over its useful life.