Increases in the quality and quantity of an economy's resources have little effect on its potential output in the long run.

Question

Quizplus · Accepted Answer

Increases in the quality and quantity of an economy's resources can have a significant effect on its potential output in the long run. If an economy's resources grow, its potential output can increase as well, allowing for greater production and economic growth over time. Additionally, improvements in the quality of resources, such as advancements in technology and knowledge, can lead to higher productivity and efficiency, further increasing potential output.

Increases in the Quality and Quantity of an Economy's Resources