A Weakness in the Club of Rome's Study Entitled the Limits

question 3

Multiple Choice

A weakness in the Club of Rome's study entitled The Limits to Growth is that

• A) it assumed the rate of population growth would slow.
• B) it did not account for technological change.
• C) it assumed a constant demand for products.
• D) it assumed a declining investment rate.

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Definitions:

Short-Run Aggregate Supply

Shows the relationship between the price level and the quantity of goods and services that firms are willing and able to supply in the short term, holding some inputs fixed.

Long-Run Equilibrium

The price level and real GDP that occurs when (1) the actual price level equals the expected price level, (2) real GDP supplied equals potential output, and (3) real GDP supplied equals real GDP demanded.

Aggregate Demand Curve

Represents the total quantity of all goods and services that households, businesses, and government are willing to buy at each price level in an economy.

Recessionary Gap

A situation where the real Gross Domestic Product (GDP) is lower than the potential GDP, indicating underperformance in an economy.