In the classical theory of growth, what is the final outcome of an increase in growth and labor productivity?
What will be an ideal response?
In the classical growth theory, a rise in labor productivity and the resulting economic growth result in a population explosion that drives real GDP per person back to the subsistence level. In the classical viewpoint, resources are limited and technological change occurs infrequently, so that technological advances are not sufficient to compensate for the lack of resources. Hence, in the long run people earn only a subsistence level of real income.
You might also like to view...
To calculate the revenue government receives when a tax is imposed on a good, multiply the
A) pre-tax equilibrium price by the pre-tax quantity. B) after-tax equilibrium price by the after-tax quantity. C) tax by the pre-tax quantity. D) tax by the after-tax quantity. E) after-tax equilibrium price by the after-tax quantity and then subtract the pre-tax equilibrium price multiplied by the pre-tax quantity.
Which factor of production includes crude oil deposits?
A) physical capital B) human capital C) land D) entrepreneurship