The quantity of real GDP supplied depends on the
A) price level, the unemployment rate, and the quantity of government expenditures on goods and services.
B) level of aggregate demand.
C) quantity of labor, the quantity of capital, and the state of technology.
D) quantity of capital, bonds, and stocks.

Question

Quizplus · Accepted Answer

The quantity of real GDP supplied depends on the quantity of labor, the quantity of capital, and the state of technology. These are the three factors of production that determine a country's potential output. The more labor and capital a country has, and the more advanced its technology, the higher its potential output of goods and services. Changes in the price level, unemployment rate, government expenditures, and aggregate demand can affect the level of real GDP supplied, but they do not determine it. Thus, choices A and B are incorrect. The quantity of capital, bonds, and stocks are not factors that directly determine the quantity of real GDP supplied, so choice D is also incorrect.

The Quantity of Real GDP Supplied Depends on the