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

question 75

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

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