Once an economy is at full employment,further growth can occur only by

Question

Quizplus · Accepted Answer

Once an economy is at full employment, further growth can only occur by influencing factors that cause potential output to expand. This can be achieved through investments in technology, infrastructure, education and training, and other measures that increase productivity, efficiency and the overall potential of the economy. Running a budget deficit, expanding the money supply, promoting slack in labor markets, or increasing the capital-output ratio above its full-employment values, may have negative effects on the economy in the long run.

Once an Economy Is at Full Employment,further Growth Can Occur