Economics Exam Questions

Question 33

• Question: What leads to an increase in output per worker?

• Correct Answer: (D) The stock of physical capital per worker.

• Explanation:

  • An increase in the stock of physical capital per worker means that each worker has more tools, equipment, and infrastructure to work with. This directly increases their productivity and output.

• Why other options are incorrect:

  • (A) Income tax rates: Higher income tax rates might disincentivize work, potentially decreasing output.
  • (B) Real interest rate: Real interest rates primarily affect investment and savings decisions, not directly the output per worker.
  • (C) The labor-force participation rate: A higher labor-force participation rate means more people are working, but it doesn't necessarily increase the output per worker.
  • (E) The number of workers per unit of capital: More workers per unit of capital would likely decrease output per worker, as each worker has less capital to utilize.

Question 34

• Statement: The United States national debt is federal.
  • This statement is incomplete and lacks context. A complete statement or question is needed for a thorough understanding.