Question

Economic growth will reduce the future real GDP of an economy. expand the production possibilities of an economy. increase an economy's nominal income, but not its real income. increase real output, but the real income level of the country will decline.

Answer 1

Answer:

The correct option is B. expand the production possibilities of an economy.

Explanation:

Economic growth can be defined as the increase in an economy's production of economic goods and services, often compared from one period of time to another. It can be measured in any of the following:

• Nominal or real (adjusted for inflation) terms.
• Gross National Product (GNP)
• Gross Domestic Product (GDP), etc.

Contributors to economic growth include:

• Increases in capital goods.
• Increase in labor force.
• Technology.
• Human capital.

In simplest terms therefore, economic growth is used to refer to an increase in the aggregate production in an economy.