In Which Theory of Economic Growth Does an Increase in Productivity

question 230

Multiple Choice

In which theory of economic growth does an increase in productivity lead to no long run improvement in living standards?
i. Classical growth theory
ii. Neoclassical growth theory
iii. New growth theory

• A) i only
• B) ii only
• C) iii only
• D) ii and iii
• E) i and ii

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Definitions:

GDP Deflator

A gauge for the cost levels of all newly produced, domestic, consumable goods and services in a national economy.

CPI

Consumer Price Index; a measure that examines the weighted average of prices of a basket of consumer goods and services, typically used as an indicator of inflation.

CPI

Short for Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

Rookie Salary

The initial compensation package awarded to a professional athlete in their first year or season of play.