In the classical model, which of these cannot increase potential output?

Correct answer D. Monetary growth

Explanation

In the classical model money is neutral, so faster money growth only raises prices. Potential output depends on real factors such as technology, capital and labour.

Report a problem

Answer checked How we write and check questions

Tip: press A, B, C or D to answer, and N for the next question.

Advertisement

Have a question about this answer?

Your email address will not be published. Required fields are marked *

Links and website addresses are not allowed in comments.