An Assumption of the Neoclassical Growth Theory Is That

question 29

Multiple Choice

An assumption of the neoclassical growth theory is that

• A)people earn a subsistence real wage in the long run.
• B)technological advances are the result of chance.
• C)the marginal product of all types of capital increases as more capital is accumulated.
• D)discoveries are a public capital good.
• E)encouraging international trade increases economic growth.

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Definitions:

Net Sales

Net sales are the total revenue from goods and services sold by a company, after deducting returns, allowances for damaged or missing goods, and discounts.

Accounts Receivable

Money owed to a business by its clients (customers) for goods or services that have been delivered but not yet paid for.

Net Income

The total earnings of a company after subtracting all expenses, including taxes, from its total revenues.

Cash Flow

The total amount of money being transferred into and out of a business, especially concerning liquidity.