The Reason Why Small Changes in Productivity Growth Rates Have

question 29

Multiple Choice

The reason why small changes in productivity growth rates have large long-term effects on economic growth over the long run is that

• A)lower productivity growth makes labor discouraged,compounding the problem
• B)lower productivity growth effects on the economy are compounded over the years,leading to large cumulative effects
• C)when the productivity growth rate falls,output actually falls
• D)lower productivity growth for one resource means lower productivity growth for all resources
• E)output usually falls when productivity grows

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Definitions:

Without Reducing

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Consumption Tax

A tax on the spending on goods and services, often levied as a sales tax, value-added tax (VAT), or goods and services tax (GST).

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entails setting aside a portion of current income for future use, either by keeping the money in cash or placing it in some form of investment.

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