__13 Longterm economic growth: (a) Shifts the productionpossibilities curve outward. (b) Decreases capacity utilization (c) Shifts the Phillips Curve rightward (d) Moves from a point inside the PPC to a point on the PPC 14. If there an increase in business investment in physical capital, then ultimately: 8:) Output and prices will both increase. ) Output will increase but change in price cannot be determined. (c) Price will decrease but change in output cannot be determined. (d) None of the above. 15. Investment in human capital: (a) Shifts the supply curve to the left. (b) Increases structural unemployment. (c) Increases labor productivity. ((1) Shifts the Phillips curve to the right. 16. If the Japanese economy continued to grow at the average annual rate achieved from 1976-1987 (4.1 percent), how long would it take for real GDP to double? (a) Approximately 6 years. (b) Approximately 15 years. (c) Approximately 18 years. ((1) Approximately 25 years. 17. If an economy is in a recession and no policy actions are taken: (a) Shortrun Phillips Curve will shift to the right. (b) Output and price level should increase as full employment is restored. (c) The PPC will shift inward. ((1) None of the above. 18. A major difference between short-run and longrun economic growth is that shortrun growth: (a) Moves the economy to the PPC, while longum growth shifts the curve outward (b) Increases capacity utilization, while long-run economic growth increases capacity (c) Moves the economy along the aggregate supply curve, while long-run economic growth shifts the long-run aggregate supply curve to the right (d) All of the above could be true 19. From the long-term per5pective of economic growth, household savings: (a) Restrain employment growth due to the paradox of thrift (b) Provide the basic source of funding for physical capital investment (0) Is a leakage that decreases potential real GDP (d) Shifts the institutional production possibilities curve inward 20. As a result of more costly fringe benets (health insurance, pensions) given to workers there should be: (a) A leftward shift of the aggregate supply curve. (b) A rightward shift of the aggregate supply curve. (c) A leftward shift of the aggregate demand curve. (d) A rightward shift of the aggregate demand curve