Part A: Multiple Choice Questions 40 marks Choose the one alternative that best completes the statement or answers the question. 1. If the UK increases its level of labour productivity, this would mean that: a. labour could earn the current level of income for fewer hours worked. b. output would fall as the number of hours worked will decline. c. the number of hours worked would be higher in the UK than in other countries. d. the same level of output will be produced in a higher number of hours. 2. The convergence hypothesis assumes that industrialized countries will grow at a slower rate because a. diminishing returns in the short run will eventually leads to economies of scale in the long run. b. with high capital per worker ratios, increasing investment will be required to replace old capital stock. c. most industrialized countries have a low ratio of capital per worker. d. most industrialized countries operate at a high level of underemployment 3. Which of the following statements is true? a. When aggregate supply is perfectly elastic, increases in aggregate demand will be inflationary. b. Economic growth that results from an increase in aggregate supply also increases the rate