In the Long Run, What Determines the Level of Total

question 65

Multiple Choice

In the long run, what determines the level of total production of goods and services in an economy?

• A)the interest rate and the amount of national saving
• B)Bthe quantity of capital and labor and production
• C)technology consumption, investment, and government spending
• D)the marginal products of capital and labor, constant returns to scale, and competition

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Definitions:

Sustained Deflation

A prolonged period in which the level of consumer prices decreases, indicating a reduction in the inflation rate below zero percent.

World War II

A global conflict that lasted from 1939 to 1945, involving many of the world's nations, including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis.

Hyperinflation

An extremely high and typically accelerating rate of inflation, leading to a rapid erosion of the real value of local currency and causing economic instability.

Money Supply

The money supply is the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.