When Production in an Economy Grows More Quickly Than the Population

question 144

Multiple Choice

When production in an economy grows more quickly than the population in that economy,which of the following must be occurring?

• A)Real GDP is falling.
• B)Incomes are growing at a slower rate than the population.
• C)Real GDP per capita is rising.
• D)Living standards are falling.

Recognize the efficiency comparison between the private and public sectors.

Identify factors contributing to government failures such as rent-seeking behavior and special-interest effects.

Understand the concept of logrolling and its impact on government decisions.

Recognize the implications of the principal-agent problem in politics.

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Definitions:

Cash Discount

A reduction in the invoice amount by the seller, granted to the buyer for early payment within a specified period.

Credit Cost Curve

The relationship between the cost of credit for a borrower and the default risk of the borrower, indicating how the cost of borrowing money increases with higher risk.

Collection Policy

Guidelines and procedures a company follows to collect payments from customers including when and how collections are pursued.