Which of the following is NOT a determinant of the long run level of real GDP ?
According to the classical dichotomy and vertical Long-Run Aggregate Supply (LRAS) curve, the long-run level of real GDP (potential output) is determined by real…
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Which of the following is NOT a determinant of the long run level of real GDP ?
Answer and explanation
Correct answer A
According to the classical dichotomy and vertical Long-Run Aggregate Supply (LRAS) curve, the long-run level of real GDP (potential output) is determined by real factors—labour supply, capital stock, natural resources, and technology—and NOT by the nominal price level.
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RPSC Assistant Professor (College Education)