MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Question
Chapter 7, Problem 3TY
To determine
To describe: The rapid price increase in given products/services, which are expected to rise over long periods and the reasons behind such price increase.
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.Which of the following prices would you expect to rise rapidly over long periods? Why?
Cable television rates
Football tickets
Internet access
Household cleaning services
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Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in response to each of the following changes?
(a) The investment rate doubles
(b) the depreciation rate falls by 10%
(c) The productivity level rises by 10%
(d) an earthquake destroys 75% of the capital stock
(e) A more generous immigration policy leads the population to double.
During the course of the twentieth century, the average workweek in the United States has gotten shorter and Americans have enjoyed greater amounts of leisure time. How has this development affected potential GDP and labor productivity?
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