Need some help answering and understanding these questions! thanks in advance! 1

Question

Need some help answering and understanding these questions! thanks in advance!

1. Which of the following explains why production rises in most years? (a) increases in the labor force (b) increases in the capital stock (c) advances in technological knowledge (d) All of the above are correct. 2. The investment component of GDP measures spending on (a) financial assets such as stocks and bonds. During recessions it declines by a relatively large amount (b) residential construction, business equipment, business structures, and changes in During recessions it declines by a relatively large amount inventory. During recessions it declines by a relatively large amount (c) financial assets such as stocks and bonds. During recessions it declines by a relatively small amount. (d) residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively small amount

Explanation / Answer

Ans:

1) Option D

All of the above are correct

In all the cases such as increase in labor force,increase in capital stock and advances in technological knowledge production rises as these have positive impact on production.

2) Option B

residential construction,business equipment, business structures,and changes in inventory.During recessions it declines by a relatively large amount.

The investment component of GDP includes Gross private domestic investment,Non-residential investment and Expenditure on capital goods.However during recession investment component is effected by large impact.

3) Option D

real and nominal variables are highly intertwined and that money can temporarily move real GDP away from its long-run trend.

The economists believe that in the short run real and nominal variables are highly intertwined and this can cause the money to temporarily move real GDP away from its long-run trend.

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