Long-term growth in production can be explained by _____
A) a rapid and accelerating increase in the price level.
B) a gradual but consistent rise in the price level.
C) better technology and know-how.
D) a trade surplus that leads to the accumulation of gold.
E) the peaks and troughs of economic fluctuations.

Question

Quizplus · Accepted Answer

Long-term growth in production can only be sustained by the continual development and use of improved technology and know-how. While economic fluctuations may play a role in short-term growth, they do not lead to sustained increases in production. A rapid increase in the price level may lead to short-term growth, but would ultimately lead to inflation and an unsustainable economic situation. A trade surplus and accumulation of gold may indicate short-term economic success, but cannot sustain long-term growth in production.

Long-Term Growth in Production Can Be Explained by _____