All of the following factors are fundamental to an economy’s potential growth rate except for:

If you're seeing this message, it means we're having trouble loading external resources on our website.

Inhaltsverzeichnis Show

Which of the following is not a source of economic growth?
What are the causes of economic growth?
Which of these factors will cause the long run aggregate supply curve to shift to the right?
What explains the long run growth of aggregate GDP?

If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked.

Statistical Techniques in Business and Economics

15th EditionDouglas A. Lind, Samuel A. Wathen, William G. Marchal

1,236 solutions

Principles of Economics

7th EditionN. Gregory Mankiw

1,394 solutions

Fundamentals of Engineering Economic Analysis

1st EditionDavid Besanko, Mark Shanley, Scott Schaefer

215 solutions

Principles of Economics

8th EditionN. Gregory Mankiw

1,335 solutions

Statistical Techniques in Business and Economics

15th EditionDouglas A. Lind, Samuel A. Wathen, William G. Marchal

1,236 solutions

Introductory Business Statistics

1st EditionAlexander Holmes, Barbara Illowsky, Susan Dean

2,174 solutions

Principles of Economics

7th EditionN. Gregory Mankiw

1,394 solutions

Statistics for Business and Economics

13th EditionDavid R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams

1,692 solutions

1. All of the following factors are fundamental to an economy’s potential growth rate except for: *

a. Labor.

b. Capital.

c. Money supply.

d. Ideas.

2. How does inflation affect the long-run real growth? *

a. Inflation causes long-run real growth to increase.

b. Inflation causes long-run real growth to decrease.

c. Inflation does not have an effect on long-run real growth.

d. There are many other factors to consider before determining how inflation will affect long-run real growth.

3. An economy’s potential growth rate is also known as what? *

a. Solow growth rate.

b. Keynesian growth rate.

c. Inflation rate.

d. Real interest rate.

4. Which of the following is an example of a negative real shock to an economy? *

a. Consumer confidence in the future of the economy falls.

b. A drought stifles crop growth for the season.

c. The government spends more money on a war.

d. The government reduces taxes.

5. A negative real shock to the economy shifts the LRAS curve to the left, causing a(n) ____________ in growth and a(n) ____________ in inflation. *

a. Increase/increase

b. Decrease/decrease

c. Decrease/increase

d. Increase/decrease

Submit

Skip to Next Lesson

Which of the following is not a source of economic growth?

Consumption increases overall economic spending, which leads to a low saving and investment rate. When the saving and investment rate is low, the overall growth rate decreases. Thus, it is correct to argue that consumption is not a source of economic growth within an economy.

What are the causes of economic growth?

Broadly speaking, there are two main sources of economic growth: growth in the size of the workforce and growth in the productivity (output per hour worked) of that workforce. Either can increase the overall size of the economy but only strong productivity growth can increase per capita GDP and income.

Which of these factors will cause the long run aggregate supply curve to shift to the right?

The aggregate supply curve shifts to the right as productivity increases or the price of key inputs falls, making a combination of lower inflation, higher output, and lower unemployment possible.

What explains the long run growth of aggregate GDP?

Answer and Explanation: Changes in productivity explain the long-run growth of aggregate (total) GDP. Productivity means the amount of output per unit of input. The four major inputs (factors of production) are land (natural resources), labor, capital, and entrepreneurship.