Which of the following is capable of increasing real GDP in the long run?

Business

1 answer:

Alja [10]3 years ago

4 0

Answer: Option (c) is correct.

Explanation:

Correct Option - An increase in the state of technology.

The aggregate supply curve in the long run is a vertical line and parallel to the y-axis. |t is perfectly inelastic in the long run.

Now, if there is increase in the money supply in the economy then this will increase the aggregate demand in the short run. Hence, aggregate demand curve shift rightwards, as a result real GDP increases in the short run and move beyond the potential level of real GDP.

Also, there is a creation of inflationary gap in the economy, as a result real GDP shifts back to its initial position at potential real GDP. So, there is no increase real GDP in the long run.

Similarly, decrease in interest rates and an increase in government spending will also results in inflationary gap in the economy. Therefore, doesn't affect the real GDP in the long run.

But an increase in the state of technology is capable of increasing real GDP in the long run. Improvement in the state of technology will shift the long run aggregate supply curve rightwards, as result there is an increase in potential GDP in the long run.

You might be interested in

Which of the following combinations should be avoided? a. high price and high quality b. low price and low quality c. heavy prom

NNADVOKAT [17]

Answer: heavy promotion and low (exclusive) availability

Explanation:

The wrong combination is high promotion and low availability, because when a product is highly promoted it would lead to high interest in that product from the consumers, this would lead to a high demand for that product from customers. And this high demand needs to be met with high supply, which is not the case here, therefore scarcity would set in.

4 0

2 years ago

As a student of Business Ethics and a managing director of a multinational company, discuss five (5) factors you will consider i

rewona [7]

Communication, ethics, conflict management, learning, and inclusion are some issues to consider when leading a multicultural and diversified workforce in Ghanaian business organizations.

<h3>How do you lead a multicultural team?</h3>

In order to foster a culture that celebrates variety and individuality, it is crucial that there be a number of rules and procedures that concentrate on organizational ethics. The manager must be aware of the requirements of the teams, encourage learning, and include the staff in organizational procedures.

Therefore, the sharing of knowledge, learning, and creativity can benefit from a diverse culture.

To learn more about the multicultural team here: brainly.com/question/27249388

#SPJ10

4 0

2 years ago

What is the best answer choice

Scrat [10]

The answer to that would be B.

3 0

3 years ago

The palmer acres inn is trying to determine its break-even point during its off-peak season. the inn has 50 rooms that it rents

ivanzaharov [21]

They don't hit their break even point with all of the additional costs. They are still $11060 under the break even point at the end of the month

5 0

3 years ago

To motivate employees, several major department stores are experimenting with incentive compensation plans, although compensatio

Evgen [1.6K]

Stores can make sure their employees are being incentivized when what they do benefits the customer and the store as a whole. Their main goal is to serve the customer because a happy customer comes back and refers their fiends. The employees can be rewarded on referral base actions, feedback cards and other ways that show management they are being honest and truthful to the customer.

3 0

3 years ago