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CFA Level 1
Economics

Impact of Technological Advancements on GDP Growth

Hard Macroeconomics Gdp And Growth

Consider the following scenario: A country experiences a sudden increase in its productive capacity due to technological advancements in its manufacturing sector. This leads to greater efficiency in production, allowing the country to produce more goods without a corresponding increase in the input used.

In the context of macroeconomic indicators, GDP (Gross Domestic Product) is frequently used to measure the economic performance of a country. Evaluate the implications of this increase in productive capacity on the country's GDP in both the short run and the long run. Which of the following statements accurately reflects the potential impact on the GDP growth rate?

Hint

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