The study of the long run in macroeconomics focuses
A)on changes to actual GDP but not on changes in potential GDP.
B)equally on potential GDP and actual GDP.
C)primarily on changes to potential GDP.
D)primarily on changes to the output gap,with a constant level of potential output.
E)solely on the supply of factors of production.

Question

Quizplus · Accepted Answer

The study of the long run in macroeconomics primarily focuses on changes to potential GDP, as this represents the economy's capacity for producing goods and services. This includes factors such as population growth, productivity improvements, and changes in the labor force. Changes in actual GDP may be of interest, but they are ultimately driven by changes in potential GDP.

The Study of the Long Run in Macroeconomics Focuses