An economic growth model
A)explains changes in nominal GDP per capita in the long run.
B)explains changes in real GDP per capita in the long run.
C)explains changes in nominal GDP per capita in the short run.
D)explains changes in real GDP per capita in the short run.

Question

Quizplus · Accepted Answer

An economic growth model focuses on changes in real GDP per capita in the long run, as it aims to describe sustained and continuous economic growth over time. It looks at factors such as investment, technological progress, human capital, and institutional improvements that can increase the economy's productive capacity over time. The short run is more concerned with the fluctuations in economic activity caused by business cycles and temporary shocks, which are not the main focus of the growth model.

An Economic Growth Model