Other Things Equal, If a Full-Employment Economy Reallocates a Substantial

question 48

Multiple Choice

Other things equal, if a full-employment economy reallocates a substantial quantity of its resources to capital goods, we would expect:

• A)present consumption to rise.
• B)future consumption to fall.
• C)a lower rate of growth of real GDP.
• D)labour productivity to rise.

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Definitions:

Distinct Entities

Separate or different things or beings with their own specific identity or characteristics.

Hierarchical Classification

A method of classifying entities in which items are arranged in a graded order from broad to specific categories.

Conservation of Number

A developmental concept in children's cognitive psychology, noting their understanding that the quantity of a substance remains the same despite changes in its shape or form.

Cognitive Development

Cognitive development is the process through which individuals acquire and evolve in their problem-solving skills, memory, learning capacity, and understanding of the world.