Over the last fifty years both real GDP and prices have trended upward in most countries.Continuing real GDP growth and inflation can be explained by
A)continuing technological progress alone.
B)continuing increases in the money supply alone.
C)continued technological progress and continuing increases in the money supply.
D)None of the above can explain continuing real GDP growth and inflation.

Question

Quizplus · Accepted Answer

Both continuing technological progress and continuing increases in the money supply contribute to real GDP growth and inflation. Technological progress increases productivity and output, while increases in the money supply lead to higher prices.

Over the Last Fifty Years Both Real GDP and Prices