Question 4

Fill in the blanks to make the following statements correct.

4.1 Long-run, sustained increases in potential output are called ___________. 

4.2 An important cost of economic growth is the sacrifice of current ___________ in exchange for investment that raises future ______________.

4.3 An increase in the real interest rate leas to a(n) __________ in the amount of national savings as households reduce their _____________.

4.4 An increase in the interest rate leads firms to ____________ their amount of desired investment.

4.5 Following a shift in either the supply of national saving or the demand for investment, there will be a change in both the equilibrium ___________ and the amount of ________ in the economy.

4.6 An important aspect of the Neoclassical growth model is that increases in the supply of one factor, all else constant, imply eventually ___________ marginal returns to that factor.

4.7 Some advanced growth theories are based on the assumption that technological change is ___________ to the economic system; others are based on the possibility that that there are _____________ marginal returns to investment.

Answer rating: 100% (QA)

41 Longrun sustained increases in potential output are called Answer Economic growth 42 An important ... View the full answer