Long-term growth in production can be explained by:
A)an improvement in the quality of resources available.
B)a gradual but consistent rise in the price level.
C)a rapid and accelerating increase in the price level.
D)a trade surplus that leads to the accumulation of gold.
E)the peaks and troughs of economic fluctuations.

Question

Quizplus · Accepted Answer

Long-term growth in production is mainly driven by an improvement in the quality of resources available, such as technological advancements, better infrastructure, and more skilled labor. Gradual but consistent rises in the price level may improve profit margins in the short term, but do not necessarily drive long-term growth. Rapid and accelerating increases in the price level may lead to inflation, market inefficiencies, and an eventual economic downturn. A trade surplus that leads to the accumulation of gold does not necessarily stimulate long-term growth in production, as it simply leads to the hoarding of a precious metal. Peaks and troughs of economic fluctuations represent short-term fluctuations in output and do not necessarily drive consistent long-term growth.

Long-Term Growth in Production Can Be Explained By