Suppose That Real Domestic Output in an Economy Is 20

question 102

Multiple Choice

Suppose that real domestic output in an economy is 20 units,the quantity of inputs is 10,and the price of each input is $4.Answer the following question on the basis of this information. Refer to the information.All else being equal,if the price of each input increased from $4 to $6,productivity would:

• A) fall from 2 to 3.
• B) fall from .50 to .33.
• C) rise from 1 to 2.
• D) remain unchanged.

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Definitions:

Treasury Bonds

Long-term government debt securities with a fixed interest rate, considered low-risk investments.

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Compounded Annually

Interest calculation method where the interest is added to the principal sum at the end of each year, affecting the total interest earned or paid.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan.