In the long run, economic growth can be expected to lead to
I. increases in consumption.
II. increases in the capital stock.
III. increases in the savings rate.
IV. outward shifts in the production possibilities curve.

Question

Quizplus · Accepted Answer

Economic growth leads to increases in consumption and the capital stock, as well as outward shifts in the production possibilities curve due to increased efficiency and technological advancements. Economic growth may also lead to increases in the savings rate as individuals and businesses have more income to save and invest. Therefore, choices I, II, and IV are all correct, but choice III is not necessarily true in every case.

In the Long Run, Economic Growth Can Be Expected to Lead