In addition to saving and investment in capital, making an even larger contribution to long- term economic growth in real GDP per person

Question

Quizplus · Accepted Answer

Technological advances lead to an increase in productivity, which results in higher output and GDP per person. A larger workforce may lead to short-term growth but not necessarily long-term growth, and higher current consumption reduces savings and investment in capital, which hinders long-term growth. Lower current consumption may increase savings and investment but may also harm the economy by creating low demand for goods and services.

In Addition to Saving and Investment in Capital, Making an Even