An Important Foundation of the New Growth Theory Is That

question 68

Multiple Choice

An important foundation of the new growth theory is that

• A) we will get more technological advances the more the government is involved.
• B) we will get more technological advances when the rewards for producing them are greater.
• C) the growth rate of the capital stock is more important than the growth rate of new knowledge in generating economic growth.
• D) improvements in labor productivity are poor measures of technological growth.

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Definitions:

Support Price

A price level set by the government or a regulatory body to stabilize the market price of a commodity, often by purchasing the commodity at this price or providing subsidies to producers.

Producer Surplus

The difference between the amount a producer is willing to accept for a good or service versus what they actually receive in the market.

Government Policy

Governmental actions intended to influence economy or social behavior, including laws, regulations, and fiscal decisions.

Producer Surplus

The difference between the price sellers are content to take for a product or service and the financial outcome they achieve.