A Small Reduction in a Country's Growth Rate Is a Concern

question 12

Multiple Choice

A small reduction in a country's growth rate is a concern to policy makers because

• A) a small change can have large effects on per capita GDP over time.
• B) a reduction usually leads to future reductions until finally the economy stagnates.
• C) policy makers focus too much on economic growth and not enough on increasing savings rates.
• D) the larger GDP is the better the economic welfare will be in the future.

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Definitions:

Unemployment

A situation in which individuals who are able and willing to work cannot find jobs.

Living Standards

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or a geographic area.

Productivity

The efficiency with which inputs are converted into outputs, typically measured as the amount of goods and services produced per unit of labor.

Policymakers

Individuals or members of government bodies who are responsible for creating and implementing laws and policies.