One of the reasons why real GDP grows is that

Question

Quizplus · Accepted Answer

Real GDP grows when capital grows as a result of investment. This increases productivity and the economy's capacity to produce goods and services. Prices increasing (A) or imports increasing (D) could contribute to nominal GDP growth, but not necessarily real GDP growth. People having more income (B) may lead to increased consumption and nominal GDP growth, but not necessarily real GDP growth. Governments collecting more taxes (E) is a result of economic growth, but not a cause of it.

One of the Reasons Why Real GDP Grows Is That