Consider the Neoclassical Growth Model

question 16

Multiple Choice

Consider the Neoclassical growth model.Sustained economic growth in the long run could best be fostered by

• A)expansionary fiscal policy.
• B)decreasing excise taxes on consumer goods.
• C)technological improvements embodied in physical or human capital.
• D)elimination of an output gap.
• E)expansionary monetary policy.

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Definitions:

Medium of Exchange

A medium of exchange is an intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties.

Non-Interest-Bearing Asset

An asset that does not generate interest income for its holder.

Measure of Wealth

A metric or approach to evaluate the value of assets owned by individuals, businesses, or countries.

Real GDP

Real GDP refers to the economic output of a country adjusted for price changes, such as inflation or deflation, providing a more accurate measure of economic performance over time.