In the long run, changes to real GDP are most likely to be caused by an increase in
A)factor prices.
B)factor productivity.
C)interest rates.
D)desired consumption.
E)factor- utilization rates.

Question

Quizplus · Accepted Answer

Factor productivity refers to the efficiency in which an economy uses its resources to produce goods and services. An increase in factor productivity allows an economy to produce more output with the same level of inputs, leading to an increase in real GDP in the long run. Factors such as technological advancements, education and training, and investment in physical and human capital can contribute to an increase in factor productivity.

In the Long Run, Changes to Real GDP Are Most