A small change in the rate of productivity growth will have:
A)a small impact on output in both the short run and the long run.
B)a large impact on output in both the short run and the long run.
C)a small impact on output in the short run but a large impact in the long run.
D)a large impact on output in the short run but a small impact in the long run.
E)no effect on output at all.

Question

Quizplus · Accepted Answer

A small change in the rate of productivity growth will have a small impact on output in the short run because existing inputs are being used more efficiently but the quantities are unchanged. However, in the long run, the cumulative effect of productivity growth will result in a large impact on output as the economy grows and produces more goods and services.

A Small Change in the Rate of Productivity Growth Will