Macroeconomics 1. U.S. labour has the highest productivity in the world, which o

Question

Macroeconomics

1. U.S. labour has the highest productivity in the world, which one of the following support this conclusion?

a. Service sector employment in the U.S. has grown less rapidly than in almost all other industrial nations.

b. Productivity growth in the U.S. has returned to its historical average?

c. All of the above.

d. Productivity growth has slowed down in all industrial nations.

2. Which one of the following courses of action open to the government does not stimulate spending?

a. Reducing federal Expenditure.

b. decreasing taxes.

c. Increasing government spending more than taxes.

d. Increasing federal expenditure.

3. Which one of the following does not help explain the slowing of productivity growth in the U.S. since 1973?

a. Decline Government regulation.

b. The decrease in the rate of capital formation.

c. A changing composition of output in favour of services.

d. Rising resource prices.

Explanation / Answer

1. The correct answer is: d)

Reason: it was due to the fact that the productivity growth in other nations has slowed down and this has hiked the productivity in the US.

2. The correct answer is: a)

Reason: it will actually reduce government spending.

3. The correct answer is: c)

Reason: all other options to some extent explain the slowing of productivity growth in the US since 1973 but the change in composition of output in favour of services actually explain the increase in productivity and not decrease in productivity.

Thanks!

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