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 and III
B) I and II
C) I
D) I, II and III

Question

Quizplus · Accepted Answer

Capital accumulation can increase potential GDP by providing more resources for production, and technology advances can increase potential GDP by improving productivity and efficiency. Growth in the quantity of money may lead to inflation but does not directly affect potential GDP growth. Therefore, choices I and II are correct, while III is not.

Which of the Following Helps Determine the Growth Rate of Potential