Which of the following will NOT cause an increase in aggregate output (Y)in the long run?
A)an increase in N
B)an increase in K
C)an increase in technology
D)a reduction in the saving rate
E)none of the above

Question

Quizplus · Accepted Answer

A reduction in the saving rate will not cause an increase in aggregate output in the long run as it reduces the amount of resources available for investment in physical and human capital, which are necessary for sustained economic growth. The other choices - an increase in N (labor force), an increase in K (physical or human capital), and an increase in technology - are all factors that can contribute to an increase in aggregate output in the long run.

Which of the Following Will NOT Cause an Increase in Aggregate