An Economy with a Long-Run Potential Growth Rate of 1

question 41

Multiple Choice

An economy with a long-run potential growth rate of 1% experiences a positive real economic shock that increases the growth rate to 2%.If intertemporal substitution subsequently takes place,what could the eventual new GDP growth rate be?

• A) 0%
• B) 1%
• C) 2%
• D) 3%

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Definitions:

Involuntary Hospitalization

The act of admitting an individual to a healthcare facility without their consent, usually for their own safety or the safety of others.

Schizophrenic Disorder

A severe mental disorder characterized by delusions, hallucinations, disorganized speech, and impaired functional ability.

Intellectual Disability

A condition characterized by significant limitations in both intellectual functioning and in adaptive behavior, which covers a range of everyday social and practical skills.

M'Naghten Standard

A legal principle defining insanity, which excuses a person from legal responsibility if at the time of the crime, they were unable to understand the wrongfulness of their actions.