According to New Growth Theory

question 122

Multiple Choice

According to new growth theory

• A)technological change is influenced by economic incentives.
• B)centrally-planned economies are the most efficient.
• C)growth in real GDP per capita occurs only if there are increasing returns.
• D)economic growth is determined by forces outside the control of the market system.

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Definitions:

Economic Theory

A set of principles that explain how economic processes work, guiding the analysis of economic behavior and decision-making.

Relatively Inelastic

Term indicating that the demand or supply for a good or service changes only slightly in response to changes in price.

Percentage Increase

A mathematical calculation to determine the relative growth of a value by a certain percentage.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to indicate that other variables remain constant during an analysis.