In the long- run, the amount of output that the economy can produce will depend on:
A) the price level.
B) the supply of labor and capital.
C) the money supply.
D) the nominal interest rate.

Question

Quizplus · Accepted Answer

The supply of labor and capital are two key factors in determining the amount of output an economy can produce in the long-run. Other factors like technology, natural resources, and institutional frameworks also play a role but the availability of labor and capital are fundamental. The price level, money supply and nominal interest rate can impact short-term economic activity but do not determine the long-run productive potential of the economy.

In the Long- Run, the Amount of Output That the Economy