Ceteris paribus,which of the following is least likely to contribute to economic growth?
A) A greater quantity of labor.
B) A greater quantity of capital.
C) An increase in prices.
D) Improved production technology.

Question

Quizplus · Accepted Answer

An increase in prices, also known as inflation, may temporarily increase economic growth by encouraging higher levels of production and consumption. However, in the long run, inflation can hurt economic growth by reducing the purchasing power of consumers and reducing investment due to uncertainty in the market. Therefore, an increase in prices is least likely to contribute to economic growth.

Ceteris Paribus,which of the Following Is Least Likely to Contribute