Long- Run Increases in Potential GDP Would Most Likely Be

question 10

Multiple Choice

Long- run increases in potential GDP would most likely be caused by a (an)

• A)decrease in saving in the short run.
• B)increased availability of key factors of production.
• C)decrease in factor- utilization rates.
• D)increases in the prices of factors of production such as wages or interest rates.
• E)decrease in factor productivity.

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Definitions:

Constraint Lines

Lines in a graph of a linear programming model representing limitations or restrictions on the resources available.

Contribution Margin

The amount of revenue from sales that exceeds the variable costs associated with producing a product or service.

Production Constraint

Limitations or restrictions in the production process that prevent a company from reaching its full production potential.

Cost-Benefit Trade-Off

The balance between the advantages and disadvantages (in terms of cost) of a decision or project, to evaluate its feasibility or value.