ECONOMICS (CBSE/UGC NET)

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ECONOMICS

AGGREGATE DEMAND

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Economics growth is best illustrated by which of the following:I. Rightward shift of the long-run aggregate supply curve.II. Outward expansion of the production possibilities curve.III. Rightward shift of the aggregate demand curve.
A
I only
B
II only
C
I and II only
D
I, II and III
Explanation: 

Detailed explanation-1: -“Economic growth is an increase in the production of economic goods and services, compared from one period of time to another” is the definition at Investopedia.

Detailed explanation-2: -Economic growth means the economy’s potential output is rising. Because the long-run aggregate supply curve is a vertical line at the economy’s potential, we can depict the process of economic growth as one in which the long-run aggregate supply curve shifts to the right.

Detailed explanation-3: -Economists define four factors of production: land, labor, capital and entrepreneurship. These can be considered the building blocks of an economy. How these factors are combined determines the success or failure of the outcome.

Detailed explanation-4: -There are three main factors that drive economic growth: Accumulation of capital stock. Increases in labor inputs, such as workers or hours worked. Technological advancement.

There is 1 question to complete.
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