2.5 Causes of economic growth

What is short-run/actual growth and what happens to AD?

• An increase in real GDP and AD shifts right

• No change in real GDP and AD remains constant

• A decrease in real GDP and AD shifts left

• An increase in real GDP and AD shifts left

What is long-run/potential growth?

• A decrease in productive capacity of the economy

• An increase in productive capacity of the economy

• No change in productive capacity of the economy

• An increase in real GDP

What is productivity?

• Input per unit of output in a given time period

• Output per worker in a given time period

• Output per unit of input in a given time period

• Input per worker in a given time period

What is labour productivity?

• Output per worker in a given time period

• Input per unit of output in a given time period

• Output per unit of input in a given time period

• Input per worker in a given time period

What is the multiplier?

• When an initial change in GDP has no effect

• When an initial change in GDP results in a greater final change

• When an initial change in GDP results in a smaller final change

• When an initial change in GDP results in an equal final change

What is net migration?

• The total number of immigrants

• The difference between emigration and immigration

• The total number of emigrants

• The total population of a country

How can productivity be improved for LRAS?

• Keep it constant

• Decrease it

• No effect on productivity

• Increase it

How does immigration boost LRAS?

• Increases workforce size, productive potential, and output

• Decreases productive potential

• Decreases workforce size

• No effect on LRAS

How does education boost LRAS?

• No effect on LRAS

• Increases quantity/quality of education or training

• Decreases human capital, efficiency, and productivity

• Decreases efficiency and productivity

How does healthcare boost LRAS?

• Decreases health and productivity

• No effect on LRAS

• Decreases productivity

• Increases quantity/quality of healthcare