New Growth Theory

question 159

Multiple Choice

New growth theory

• A)states that the rate of technological change is determined outside the working of the market system.
• B)does not adequately explain the factors that determine productivity.
• C)states that the rate of technological change is caused by economic incentives.
• D)states that the rate of technological change is unaffected by economic incentives.
• E)states that the rate of capital accumulation determines the rate of economic growth.

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Definitions:

Opportunity Cost

The rejection of potential benefits from alternative propositions when favoring one.

Comparative Advantage

The ability of an individual or entity to produce goods or services at a lower opportunity cost than other individuals or entities.

Economic Investment

The expenditure on capital goods used to produce other goods or services in the future, contributing to a country's productive capacity.

Fermentation System

A biological process using microorganisms to convert organic materials into alcohol, gases, or acidic products.