Which of the following helps determine the growth rate of potential GDP?
I. capital accumulation
II. technology advances
III. growth in the quantity of money
A) I
B) I and II
C) I and III
D) I, II and III

Question

Quizplus · Accepted Answer

The growth rate of potential GDP is determined by factors that influence the productive capacity of an economy, which include capital accumulation (investment in physical assets) and technology advances. The growth in the quantity of money primarily affects inflation and nominal variables, not the real growth potential of the economy.

Which of the Following Helps Determine the Growth Rate of Potential