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:

Demand Schedule

A demand schedule is a table that shows the quantity of a good or service that consumers are willing and able to purchase at various prices.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Responsiveness of Quantity

The degree to which the quantity demanded or supplied responds to changes in price, income, or other factors.

Responsiveness of Price

The degree to which the demand or supply of a product changes in response to a change in price.