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.
E)explains changes in the unemployment rates in the long run.

Question

Quizplus · Accepted Answer

An economic growth model explains changes in real GDP per capita in the long run by identifying the factors that contribute to the increase in productivity and output over time. It focuses on the supply-side of the economy and factors such as capital accumulation, technological progress, and human capital development. It does not necessarily explain short-run fluctuations in economic activity or changes in other macroeconomic variables such as unemployment rates.

An Economic Growth Model