Neoclassical Growth Theory Assumes That Technological Progress

question 173

Multiple Choice

Neoclassical growth theory assumes that technological progress

• A) is determined by investment.
• B) is determined by saving.
• C) responds to economic incentives.
• D) is a purely chance event.

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Definitions:

Positive Slope

In a graph, a line that goes up to the right, indicating a positive relationship or increase between two variables.

Liquidity Preference Theory

A theory that suggests interest rates are determined by the supply and demand for money, with people preferring liquidity over committing to long-term investments.

Upward Sloping

A term that describes a line or curve on a graph that shows an increase in a variable in relation to another variable as you move from left to right.

Inverse Relationship

An inverse relationship is a situation in which two variables move in opposite directions; as one increases, the other decreases.