In the Classical Growth Theory, Economic Growth Eventually Stops Due

question 87

Multiple Choice

In the classical growth theory, economic growth eventually stops due to

• A)diminishing returns.
• B)knowledge capital being easily replicated.
• C)the real rate of interest falling back down to its target rate.
• D)real GDP per person becoming too high.
• E)high population growth resulting from the increase in real GDP per person.

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Definitions:

Basic Contention

The fundamental disagreement or argument typically relating to a particular issue or theory.

Classical

Pertains to economic theories and models that emphasize free markets, competition, and the self-regulating nature of economies, first developed in the 18th and 19th centuries.

Wages

Payments made to workers or employees as compensation for their labor or services.

Prices

The monetary value assigned to goods and services, determined by various factors including supply and demand dynamics.