The level of output that corresponds to the full employment of the labor force: a. is also...
Question:
The level of output that corresponds to the full employment of the labor force:
a. is also called potential GDP.
b. shifts to the right as the economy accumulates more resources.
c. continuously shifts to the right over time as technological advances take place.
d. all of the above
Gross Domestic Product (GDP):
In the domain of economics, the gross domestic product (GDP) is determined by taking a sum of the market value of all finished goods and services produced in the economy. The GDP or output value is governed by the level of resources deployed in the economy.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerThe correct answer is option d. all of the above.
The Gross Domestic Product (GDP) or output corresponding to the full employment of the labor force...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Full Employment GDP: Definition and Examples
from
Chapter 8 / Lesson 2
35K
Learn the full employment definition and understand how full employment output is represented in economics. Study different perspectives of full employment GDP.
Related to this Question
- An increase in shifts the production function, and makes it possible to produce higher level of GDP with capital per hour worked. a. technology; down; the same amount of b. technology; up; the same am
- Because of diminishing returns, an economy can continue to increase real GDP per hour worked only if: A) the per-worker production function shifts downward. B) there is technological change. C) there continue to be decreases in capital per hour worked. D)
- Because of diminishing returns, an economy can continue to increase real GDP per hour worked only if: a. there is technological change. b. the per-worker production function shifts downward. c. there continue to be decreases in capital per hour worked. d.
- The aggregate supply curve that defines the level of full employment or potential output based on a given amount of resources, efficiency, and technology in the economy is called: A. short minus long aggregate supply curve. B. long minus short run aggre
- If an economy's production possibilities curve has shifted out, we can unambiguously conclude that: a. the supply of natural resources increased. b. potential GDP increased. c. technology improved. d. the supply of labor increased.
- Shifting the production possibilities curve An outward shift of an economy's production possibilities curve is caused by a. entrepreneurship. b. an increase in labor. c. an advance in technology. d. all of the above.
- An outward shift of an economy's production possibilities curve is caused by: a. entrepreneurship b. an increase in labor c. an advance in technology d. all of the above
- The increase in real GDP per hour of labor that results from an advance in technology makes labor [{Blank}] productive [{Blank}]. A. more; at all quantities of capital B. more; and capital less productive C. less; and capital more productive D more; onl
- An outward shift of an economy's production possibilities curve is caused by an: a. increase in capital. b. increase in labor. c. advance in technology. d. All of the answers are correct.
- According to Keynes, equilibrium income and output are determined by A. available resources and technology in the short run. B. aggregate demand in the short run. C. the position of the long-run aggregate supply curve. D. the natural rate of unemployment.
- Technological advances make it possible to: a. produce goods without using any resources. b. obtain the same output by using more resources. c. obtain the same output by using fewer resources. d. lower labor productivity.
- Technological changes that increase productivity shift the A. production function forward. B. average total cost curve downward. C. marginal cost curve upward as output increases. D. all of the above
- Potential GDP is: a. The maximum amount of output that can be produced given the labor force, capital stock, and technology. b. Variable over the business cycle. c. None of the above. d. The mini
- An increase in an economy's productive resources a. implies that the law of increasing costs no longer applies. b. shifts its production possibilities curve inward. c. shifts its production possibilities curve outward. d. has no effect on its production p
- Which of the following determinants shifts the long-run aggregate supply curve to the right? A) Labor resource availability B) Changes in capital C) Production technology D) All of the above
- Key Concept: Economic growth An outward shift of an economy's production possibilities curve is caused by an a. Increase in capital. b. Increase in labor. c. Advance in technology. d. All of the answers are correct
- An outward shift of an economy's production possibilities curve is caused by which of the following? a. entrepreneurship b. an increase in labor c. an advance in technology d. all of the above
- A non-linear (bending) production possibilities model assumes that A. Some land or labor is more productive in one use than another B. Technology can advance C. the opportunity cost of producing more of something will remain constant
- The construction of a production possibilities curve assumes: A. the quantities of all resources are unlimited B. some resources are unemployed. C. time is fixed. D. there is no inflation in the econo
- Technological progress lowers the demand for labor as firms find it cost-efficient to switch to more capital-intensive (less labor-intensive) production processes. How would an economy-wide technological improvement affect wages?
- We often work with production technologies that give rise to initially increasing marginal product of labor that eventually decreases. For such production technologies, the marginal product of labor is increasing so long as the slope of the production fr
- The long-run aggregate supply curve will not shift if there is a change in A. amount of capital. B. the price level. C. amount of labor. D. technology.
- Assume that all the resources (labor, capital, land, and technology) in an economy are optimally placed. With the scarce availability of resources, the production of an additional unit causes a rise in the production cost more than the average. It can be
- The long-run aggregate supply curve (LRAS) is Y = Yf, which depends on the amount of resources and the level of technology innovation. If a country has more resources and better technology, which of the following is true? A. The LRAS curve will shift to
- When an economy faces diminishing returns: A) the slope of the per-worker production function becomes flatter as capital per hour worked increases. B) the per-worker production function shifts to the left. C) the per-worker production function shifts to t
- A key feature in the AD/AS model is that an economy can deviate from its potential output in the short run and eventually it will move comparable to this level. The Potential GDP/output is the maximum level of output an economy can produce given the exist
- The production possibilities curve will shift outward, upward, and \ or, to the right when? A) corporate profits increase. B) Economic growth occurs. C) Resources are used more efficiently. D) there is a reduction in labour.
- Full-employment output is also called: A) zero-unemployment output. B) equilibrium output. C) potential output. D) zero-savings output.
- Technological innovations will cause: a. the production possibilities curve to shift to the left. b. the production possibilities curve to shift to the right. c. the production possibilities curve to stay the same. d. an economy to operate below its produ
- If a higher level of production allows workers to specialize in particular tasks and be more productive, a firm will likely exhibit of scale and average total costs. a. economies, falling b. economies, rising c. diseconomies, falling d. diseconomies, risi
- Generally, opportunity costs increase and the production possibilities frontier bows outward. Why? a. Unemployment is inevitable. b. Resources are not equally useful in all activities. c. Technology is slow to change. d. Labor is scarcer than capital.
- A shift in the production possibilities frontier curve will occur as a result of all of the following except: a. A change in the endowment of resources, b. A change in technology, c. A change in the production of one good relative to another good, d. A ch
- The marginal product of labor initially rises as more labor is employed because of: a. total factor productivity. b. a fall in the cost of hiring additional labor. c. constant returns to scale. d. division and specialization of labor. e. an increase in pr
- The law of diminishing marginal returns states that a. as additional units of labor are added to a fixed quantity of another resource, there is some output level beyond which total output will begin to diminish. b. as additional units of labor are added
- On a given production possibilities frontier, which of the following is not assumed to be fixed? a) the amount of labor available. b) the amount of capital available. c) the level of technology. d) the amount of land and natural resources available.
- On a given production possibilities frontier, which of the following is not assumed to be fixed? A. the amount of labor available B. the amount of capital available C. the level of technology D. the amount of land and natural resources available E. produc
- If there is an increase in labor productivity: a) the production possibilities curve would shift outward and the long-run aggregate supply curve would shift rightward. b) the production possibilities curve would shift inward and the long-run aggregate sup
- When constructing a typical production possibilities curve, economists assume a. economic resources are underutilized. b. resources are equally productive in many alternative uses. c. all available resources are fully employed. d. production technology is
- Increases in resources or improvements in technology will cause the production possibilities frontier to: a. shift outward. b. shift upward. c. become a straight line. d. become horizontal. e. become vertical.
- Which of the following would most likely shift the production possibilities curve inward? a. An increase in the number of hours factories are in use b. An increase in the production of capital goods c. Technological progress d. A decrease in the ave
- A nation's production possibilities curve is "bowed out" from the origin because a. resources are not perfectly adaptable to the production of alternative goods. b. capital goods and consumer goods utilize the same production technology. c. resources are
- If a technological advance reduces the amount of variable resources needed to produce any given level of output, this will cause: a. the AVC curve to shift downward. b. the MC curve to shift downwa
- If a higher level of production allows workers to specialize in particular tasks, a firm will likely exhibit _ of scale and _ average total cost. a. economies, falling b. economies, rising c. diseconomies, falling d. diseconomies, rising
- A point outside the production possibilities frontier: A. represents full employment of resources. B. cannot be reached using the available technology. C. would not represent an efficient combination of goods. D. is less desirable than one that lies insid
- A point lying outside the production possibilities curve of a certain nation (A) is not achievable at this time for this nation, given its current resources (B) causes labor unrest (C) means this n
- A production possibilities curve is drawn based on which of the following assumptions? a. Resources are fixed and fully employed, and technology advances at the rate of growth of the economy overall. b. Resources such as nonrenewable resources will declin
- Given a production possibilities curve for defense goods and non-defense goods, which of the following is not true? A production point outside the curve: a) may be attained if new resources are discovered. b) may be attained by acquiring new technology.
- The economy experiences economic growth if: A.the resource base decreases. B.the production possibilities frontier shifts inwards. C.the number of workers decreases. D.the production possibilities frontier shifts outwards.
- Given production possibilities frontier (a), point N suggests that The economy is: a. attaining full employment but not efficient production. b. attaining efficient production but not full employment. c. using its available resources inefficiently. d. att
- A production possibilities curve is drawn based on which of the following assumptions? a. Resources are fixed and fully employed, and technology advances at the rate of growth of the economy overall. b. Resources such as nonrenewable resources will decl
- The long run aggregate supply curve is vertical at: a. Potential output. b. The actual level of real output. c. The actual level of nominal output. d. 100% employment of the labor force.
- A point on the production possibilities frontier reflects an: a. attainable point with full employment of all resources. b. attainable point without full employment of all resources. c. unattainable point without full employment of all resources. d. unatt
- The long-run aggregate supply increases as: A. new production technology is introduced B. the quality of labor declines C. the average price level increases D. the minimum wage rate increases
- A point beyond (to the right of) the production possibilities curve illustrates: a. a production combination of no inflation and no price changes over time. b. a production outcome that cannot be achieved at this point in time. c. that resources are not u
- The bowed-out (concave) shape of a production possibilities frontier, A) is due to capital accumulation. B) is due to technological change. C) reflects the existence of increasing opportunity cost. D) is due to the equal use of resources in all activities
- Technological change: A. shifts the aggregate production function downward. B. raises total factor productivity. C. is not as important as infrastructure maintenance. D. relies on consumption incr
- World output of goods and services increases with specialization because: a. the world's resources are being used more efficiently. b. each country's production possibilities curve shifts rightward. c. each country's workers are willing to work harder tha
- According to the neoclassical growth model, a technological change [{Blank}] and a change in the capital stock [{Blank}]. a) Shifts the productivity curve; shifts the productivity curve, b) Shifts the productivity curve; creates a movement along the pro
- A production possibilities frontier can shift outward for all of the following reasons except: A. a larger work force. B. a decrease in the size of the labor force. C. an increase in the skills of the labor force. D. an improvement in technology.
- The production side of an economy consists of a single input (labor, L) and two production goods, Rope (R) and Shoes (S). Technology is such that the marginal productivity of labor in the production o
- Which of the following is likely to affect the position and shape of society's production possibilities frontier? a. Volume of physical resources. b. Level of labour skills. c. Level of technology. d. Amount of factories on hand. e. All of the above are c
- A non-linear ("bending") production possibilities model assumes that: a. technology can advance. b. all combinations of output are possible c. the opportunity cost of producing more of something will remain constant. d. some land or labor is more producti
- When an economy grows, its production possibilities frontier: a. shifts to the right. b. shifts to the left. c. shifts upward. d. shifts downward.
- In the production possibilities model of an economy, when there is full employment of resources A. a nation will be operating at an interior point within its production possibilities curve. B. a nation will be operating on the production possibilities c
- Changes in technology can cause changes in the productivity of a resource. Technological change can be economy-wide, industry-specific, or can occur within one firm's production process. Explain how a change in the productivity of a resource changes the d
- Labor productivity is increased by all of the following except A. an unskilled workforce. B. a larger number of employees. C. modern technology. D. higher marginal costs relative to production.
- Which of the following will cause a decrease in aggregate quantity supplied? a. An increase in worker productivity. b. A decrease in the prices of inputs. c. A lower price level. d. Technological changes that lower production costs. e. An increase in the
- Suppose the aggregate production function for an economy is given by where Y is potential GDP, T is the average level of technology, H is the average level of human capital, K is the capital stock, an
- The Production Possibilities Model/Frontier(PPF) illustrates the concepts of Scarcity, Choice(trade-off), and Opportunity Cost(value forgone); under the assumptions of: fixed (limited) resources, fixed technology, efficient production and full employment,
- The assumption that does not shift the production possibility frontier is: A. The amount of labor available B. The amount of the capital resources C. The level of unemployment D. The rate of techn
- Which of the following will cause the production possibilities curve for two goods to shift to the left? Select one: a. An increase in the amount of resources needed to produce the goods. b. A decrease in the technology used to produce the goods. c. An
- The ability of an economy to produce greater levels of output per time period is called: a. economic growth b. positive economics c. negative economics d. the law of specialization
- Marginal physical product of labor measures the _____. a. quantity of output produces by hiring workers b. change in output generated by hiring an additional worker c. change in revenue generated by hiring an additional worker d. change in cost generate
- Potential GDP is the value of real GDP when all the economy's factors of production, and, are fully. a. wages; rent; interest; profits; optimized b. average costs; marginal costs; variable costs; fixed costs: minimized c. labor; capital; land; entrepreneu
- 1. A production possibilities frontier can shift outward if a. resources are shifted from the production of one good to the production of the other good. b. the economy abandons inefficient producti
- Assume a closed economy, perfectly elastic labor supply, and linear technology. Suppose the incremental capital-output ratio (ICOR) is 3, the depreciation rate is 3%, and the gross savings rate is 10%
- Marginal physical product of labor measures the: a. quantity of output produced by hiring workers. b. change in output generated by hiring an additional worker. c. change in revenue generated by hiring an additional worker. d. change in cost generated b
- The long-run aggregate supply curve (LRAS) is Y = Y_f, which depends on the amounts of resources and the level of technology innovation. If a country has more resources and better technology, which of the following is true? A. The LRAS curve will shift to
- Increasing marginal returns to labor might occur at low levels of labor input because of A. differing factor proportions. B. decreasing use of machinery and increasing use of technology. C. increasing average costs. D. increasing specialization of tasks.
- The marginal revenue product of labor is the A. addition to total revenue when the firm produces and sells an extra unit of output. B. amount produced per worker per time period. C. change in total output that is produced when one extra worker is employed
- The ability of an economy to produce greater levels of output per time period is called: a. positive economics. b. negative economics. c. economic growth. d. the law of specialization.
- A shift in the production possibilities frontier curve will occur as a result of all of the following except: a) a change in the endowment of resources b) a change in technology c) a change in the production of one good relative to another good d) a chang
- If an economy is producing at a point inside its PPF: a) it is producing efficiently. b) it is producing beyond its production possibilities. c) it is possible to produce more of one good without sacrificing some of the other good. d) full employment is a
- An increase in a country's technology would most likely: A. move the country further up its production possibilities curve. B. move the country to a point closer to its production possibilities curve C. shift its production possibilities curve to the righ
- A production possibilities curve is drawn based on which of the following assumptions? a. Resources are fixed and fully employed, and technology advances at the rate of growth of the economy overall. b. Resources such as non-renewable resources will dec
- Consider an economy described by the production function: Y = F(K,L) = K^{0.4} L^{0.6} a. What is the per-worker production function? b. Assuming no population growth or technological progress, find the steady-state capital stock per worker, output per
- The law of diminishing marginal productivity states: a. that in the presence of a fixed factor, at some point average product of labor starts to fall as more and more variable inputs are added. b. that average total costs of production initially fall and
- If a higher level of production allows workers to specialize in particular tasks, a firm will likely exhibit ....................... of scale and ........................... average total cost. a. economies, falling b. economies, rising c. diseconomies
- An improvement in technology causes the production possibilities frontier (PPF) to? a. shift to the right. b. pivot upward. c. shift to the left. d. pivot downward.
- 1. Full-employment output is the level of output that firms in the economy supply when a. The unemployment rate is zero b. All capital is fully utilized c. Wages and prices have fully adjusted d. Taxe
- Productivity is defined as the amount of output produced given: a. a set of prices. b. a specific level of inputs. c. a production possibilities frontier. d. workers' willingness to work.
- Economic growth in the long run: 1- shifts the production possibility curve outwards 2- moves the economy along the production possibilities curve 3- shifts the aggregate demand curve to the left 4- m
- A shift outward of the production possibilities frontier line indicates: a. economic expansion has occurred and more of each good or resource can be produced. b. a change between two goods produced. c. less of both goods can be produced. d. the produc
- A recessionary output gap implies that A. the intersection of AD and AS occurs where real GDP exceeds potential output. B. there is upward pressure on wages. C. the economy's resources are being used at more than their normal capacity. D. the intersection
- The LRAS curve is nearly vertical because: a. When the public gets very rich, they do not need more goods and they only bid the prices up for existing goods b. As we approach potential GDP, the economy can not expand output, given our resource base and le
- Productivity measures: A. real output per unit of input B. per-unit production costs. C. the changes in real wealth caused by price level changes. D. the amount of capital goods used per worker.
- 1. The marginal product (MP) is the change in total product from one additional unit of input (labor). a) True b) False 2. Dis-economies of scale result when increases in output lead to .......
- If an economy is operating at a point that is outside of its production possibilities Frontier then it can be assumed that it is: a. unsustainable b. misallocated c. full utilized d. underemployed
Explore our homework questions and answers library
Browse
by subject