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24 Cards in this Set
- Front
- Back
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major goal of shortrun macro
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move towards production possibilities
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A short-run increase in capacity utilization:
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Moves the economy to a point closer to its existing production possibilities curve.
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A long-run increase in capacity:
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Shifts the production possibilities curve rightward.
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Economists define economic growth in terms of changes in:
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Potential GDP.
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In the short run, economic growth comes from
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Increased use of our productive capabilities.
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Long-run macroeconomic growth:
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Shifts the production possibilities curve outward.
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Long-run economic growth can occur as the result of:
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A technological advance.
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Long-run economic growth can be achieved with:
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A rightward shift in the long-run aggregate supply curve.
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Which of the following also occurs as the production possibilities curve shifts outward?
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Aggregate supply increases
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An economy experiences economic growth whenever
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Real GDP rises
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The process of economic growth is:
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Cumulative, whereby gains made in one year accumulate in future years
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Which of the following measures productivity?
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GDP per worker
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In recent decades, a primary source of growth in U.S. output has been:
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Increased productivity per worker.
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Improvements in output per worker
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Depend in large part on increases in the quantity of capital equipment and the quality of capital equipment
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Additional capital makes its best contribution to economic growth by
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Enhancing labor productivity.
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Which of the following could impede productivity improvements?
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Lack of savings
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Which of the following has made the greatest contribution to economic growth over time?
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R&D
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The "new growth theory" of economic growth emphasizes the importance of:
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Investing in ideas.
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Which of the following policy levers definitely enhances productivity?
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Development of human capital
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Long-run economic growth can be illustrated in Figure 17.1 by a
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Shift outward of the production-possibilities curve.
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Expansionary monetary and fiscal policies are designed to move the economy in Figure 17.1, in the short run, from point:
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Inside production possibilities curve to the border of curve
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Long-run growth policies
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designed to shift the production possibilities curve outward from the origin.
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Using Figure 17.6, long-run economic growth implies
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LRAS moves to the righ
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The LRAS has shifted to the right indicating long-run economic growth
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The increased standard of living has caused aggregate demand to increase as well.
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