The Key Difference Between the Neoclassical Growth Theory and the Classical

question 13

Multiple Choice

The key difference between the neoclassical growth theory and the classical growth theory is that

• A)capital is not subject to diminishing returns under classical growth theory.
• B)capital is subject to diminishing returns under classical growth theory.
• C)increases in population drive workers' incomes back down to the subsistence level in classical growth theory.
• D)growth in the neoclassical growth theory ends with a population explosion.
• E)in classical growth theory, the pace of technological change influences the economic growth rate but economic growth does not influence the pace of technological change.

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Definitions:

Period Costs

Expenses directly tied to a specific time period, such as rent, utilities, and administrative salaries, and not directly to the production process.

Units Sold

The number of individual items that have been sold over a specified period.

Period Costs

Costs that are not directly related to the manufacturing process and are charged as expenses in the period they arise.

Units Sold

The total quantity of a company's product that was sold during a specified period.