Identify below what is NOT considered to be a cause of economic growth ?
Correct answer: C. An increase in the money supply
- A. An increase in the quantity of labor and capital
- B. An increase in labor productivity
- C. An increase in the money supply
- D. An increase in technology
Explanation
Long-run growth is driven by more labour and capital, higher productivity and technological progress. A larger money supply mainly affects nominal variables and does not by itself increase the economy's productive capacity.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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