What is the key proposition of new growth theory that makes economic growth persist?
What will be an ideal response?
The key proposition that makes growth persist indefinitely in the new growth theory is the assumption that the returns to knowledge and human capital do not diminish. As a result, increases in knowledge do not cause diminishing returns and the incentive to innovate remains high. As people accumulate more knowledge, the incentive to innovate does not fall and so people continue to innovate new and better ways to produce new and better products. This innovation means that economic growth persists indefinitely.
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Which of the following statements is true?
A) Comparative statics is a tool that can be used in both optimization in levels and optimization in differences. B) Marginal analysis is a key tool used while optimizing in levels. C) Comparative statics involves calculating the incremental cost of moving from one alternative to the next best alternative. D) Marginal analysis is the comparison of economic outcomes before and after some economic variable is changed.
The purchase by a foreign government of an airplane produced in the United States is included in U.S
A) government purchases. B) investment expenditures. C) consumption expenditures. D) net exports.
An appreciation of the U.S. dollar has what impact on Harley-Davidson (HD), a U.S. manufacturer of motorcycles?
a. domestic sales of HD motorcycles increase and foreign sales of HD motorcycles increase b. domestic sales of HD motorcycles decrease and foreign sales of HD motorcycles increase c. domestic sales of HD motorcycles increase and foreign sales of HD motorcycles decrease d. domestic sales of HD motorcycles decrease and foreign sales of HD motorcycles decrease e. only manufacturers who produce traded goods are affected
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point B to Point C so that an additional 20 OLED televisions could be produced, production of LCD televisions would have to be reduced by
A. more than 30. B. exactly 60. C. fewer than 30. D. exactly 30.