In Neoclassical Growth Theory, If the Rate of Return on Capital

question 35

Multiple Choice

In neoclassical growth theory, if the rate of return on capital increases due to a technological advance, then

• A)the rate of return on capital will eventually decline.
• B)the rate of return on capital will never decline.
• C)real GDP per hour of labour will decrease.
• D)population growth will explode.
• E)capital per hour of labour will decrease.

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Definitions:

Fetal Organs

The organs inside a fetus that develop during pregnancy, crucial for life support upon birth.

First Trimester

The initial stage of pregnancy that spans from conception to 12 weeks, during which vital development such as implantation, placenta formation, and organ development occurs.

Developing Fetus

A term referring to an embryo that has reached a stage of development where it possesses recognizable human features, often considered to be after the first trimester of pregnancy.

Newborns

Infants in their first few weeks of life, characterized by rapid physical and neurological development and high dependency on caregivers.