Which of the following is true?
A)Achieving full employment, stable prices and a satisfactory external balance in the short run facilitates the achievement of sustainable economic growth in the long run.
B)Sustainable economic growth is determined by the growth and productivity of the labor force only.
C)Inflation increases the real value of money balances held.
D)Increases in inflation increase real after-tax returns.

Question

Quizplus · Accepted Answer

Achieving full employment, stable prices, and a satisfactory external balance in the short run is important for laying the foundation for sustainable economic growth in the long run. Full employment ensures that all available resources (including labor) are utilized efficiently, leading to higher productivity and potential output. Stable prices ensure that inflation does not erode the purchasing power of people's salaries and savings, which can increase economic uncertainty and undermine confidence. A satisfactory external balance ensures that a country's imports and exports are in balance, avoiding trade imbalances that could lead to economic instability. All of these short-run objectives are essential for creating the conditions for sustainable economic growth in the long run.

Which of the Following Is True