One principle of economic growth is the notion that, to raise living standards over time, an economy must
A) have full employment of its labor force.
B) devote some portion of its current output to increasing its future output.
C) maintain low inﬂation over the years.
D) have a small population so that its GDP per person will be high.

Question

One principle of economic growth is the notion that, to raise living standards over time, an economy must
A) have full employment of its labor force. 
B) devote some portion of its current output to increasing its future output. 
C) maintain low inﬂation over the years. 
D) have a small population so that its GDP per person will be high.

Quizplus · Accepted Answer

Devoting some portion of current output to increasing future output is known as investment, which is a key principle for economic growth. By investing in infrastructure, education, and research and development, an economy can increase its productivity and output, leading to higher living standards over time. Full employment, low inflation, and a small population can also contribute to economic growth, but they are not the primary driver.

One Principle of Economic Growth Is the Notion That, to Raise