Which of the following may increase real GDP in the short run but may actually decrease the long- run growth rate of GDP?
A)increase in factor- utilization rates in the short run
B)increase in the unemployment rate
C)increase in factor supplies
D)decrease in households' desired saving
E)decrease in factor productivity

Question

Quizplus · Accepted Answer

A decrease in households' desired saving can boost consumption and increase real GDP in the short run. However, it may reduce the funds available for investment, potentially decreasing the long-run growth rate of GDP by limiting capital accumulation.

Which of the Following May Increase Real GDP in the Short