If Per Capita GDP Growth Exceeds Labor Productivity Growth

question 44

Multiple Choice

If per capita GDP growth exceeds labor productivity growth,

• A)human capital must be increasing
• B)the labor-capital ratio must be decreasing
• C)employment must be growing faster than the population
• D)the data are incorrect; this could not occur
• E)physical capital must be increasing

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Definitions:

Loanable Funds

This refers to the resources or funds available for borrowing in the financial markets, used for investments and purchases.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Future Value

The worth of an asset or cash on a future date that has the same value as a certain amount presently.

Present Value

A calculation that determines the current worth of a future sum of money or stream of cash flows, given a specified rate of return.