Suppose That an Economy's Labor Productivity and Total Worker-Hours Each

question 33

Multiple Choice

Suppose that an economy's labor productivity and total worker-hours each grew by 3 percent between year 1 and year 2. We could conclude that this economy's

• A) real GDP remained constant.
• B) capital stock increased by 3 percent.
• C) production possibilities curve shifted inward.
• D) production possibilities curve shifted outward.

---

Definitions:

Long Maturity

Long maturity refers to bonds or other fixed-income securities with a longer period until their expiry date, typically associated with greater sensitivity to interest rate changes.

Modified Duration

A measure of the sensitivity of a bond's price to changes in interest rates, reflecting how much the price is expected to change with a 1% move in rates.

Yield Change

A change in the rate of return on an investment, often used in the context of bonds to indicate a change in interest rates or bond prices.

Price Decline

A decrease in the market price of an asset or security over a certain period.