Other Things Equal, If a Full-Employment Economy Reallocates a Substantial

question 48

Multiple Choice

Other things equal, if a full-employment economy reallocates a substantial quantity of its resources to capital goods, we would expect:

• A)present consumption to rise.
• B)future consumption to fall.
• C)a lower rate of growth of real GDP.
• D)labour productivity to rise.

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Definitions:

Enlightenment

A philosophical movement in 17th and 18th century Europe emphasizing reason, individualism, and skepticism towards traditional doctrines.

Scientific Revolution

The period of major transformation in scientific thought and method that took place in Europe during the 16th and 17th centuries, leading to advances in physics, astronomy, biology, and chemistry.

Grand Tour

A cultural and educational trip traditionally undertaken by young European aristocrats of the 17th and 18th centuries to major European cities to enrich their education.

Pompeo Batoni

An 18th-century Italian painter known for his classical portraits and historical subjects, representative of the Grand Tour artistic patronage.