Which of the Following Correctly Describes the Relationship Between Productivity

question 108

Multiple Choice

Which of the following correctly describes the relationship between productivity growth,unemployment,and the economy's production possibilities frontier?

• A) An increase in productivity moves the economy from inside the production possibilities set to its frontier.
• B) An increase in productivity shifts the economy from the production possibilities frontier to a point outside the production possibilities set.
• C) An increase in unemployment shifts the economy further inside its production possibilities set.
• D) An increase in unemployment shifts the economy from a point outside the production set back to the production possibilities frontier.
• E) A reduction in unemployment shifts the entire production possibilities frontier outward.

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Definitions:

Correlation

A statistical measure that indicates the extent to which two variables fluctuate together, showing whether and how strongly pairs of variables are related.

Variance Accounted

The proportion of total variation in a dataset that is explained by a statistical model.

Correlation

A statistical measure that expresses the extent to which two variables change together; indicating the strength and direction of a relationship.

Coefficient of Determination

A statistic that indicates the proportion of the variance in the dependent variable predictable from the independent variable(s).