Which one of the following statements about growth theories is CORRECT?
A) In the new growth theory, knowledge is not subject to diminishing returns.
B) In neoclassical growth theory, technological progress is the result of rapid increases in saving and investment in capital per person.
C) In classical growth theory, real GDP per person is unrelated to the subsistence real GDP.
D) In classical growth theory physical resources are unlimited.
A
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A market system (market economy) depends on the market to
a. find the most efficient way of using resources. b. determine how large the budget deficit should be. c. decide how much government regulation there should be. d. provide minimum incomes for everyone. e. All of the above are correct.
According to the maximin criterion, income should be transferred from the rich to the poor as long as it
a. raises the well-being of the least fortunate. b. does not alter incentives to work and save. c. promotes an equal distribution of income. d. does not lower the welfare of the elderly.