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WAEC Economics 1997 Question 14

Question 14

National Income

In the long-run, potential GNP is variable because I. technological change takes place II. the quantity of labour and capital is not fixed III. unemployment is not constant

  1. A.I only
  2. B.II only
  3. C.I and II only
  4. D.I and III only
  5. E.III only
Show the answer and explanation

Answer: C (I and II only)

Explanation

Potential GNP depends on the quantity of resources and technology; unemployment affects actual GNP, not potential GNP.