What are the factors that contribute to productivity growth in the market economy and which of them is considered most important?
There are three oft-cited factors that contribute to productivity growth. The first is the education and experience of the labor force that enables workers to produce more and better goods in a given period of time. The second is investment in plant and equipment that gives workers more and better tools to do their work with. The third is innovation-the discovery and introduction of new production methods and new products that increase the productivity of workers. Innovation is considered the most important of these three factors. Competition between firms in terms of innovation is considered to be the main engine of growth in the market economy.
You might also like to view...
The short-run average cost curve shows the lowest possible average cost corresponding to each output level, assuming that all inputs are variable.
Answer the following statement true (T) or false (F)
Suppose that price is below the minimum average total cost (ATC) but above the minimum average variable cost (AVC), and the market price is expected to rise at least to ATC in the near future. In the short run, a firm that is a price taker would:
a. immediately shut down and get out of the industry. b. continue to produce a quantity such that marginal revenue equals marginal cost. c. shut down temporarily, in hopes of restarting in the near future. d. cut price and expand output in hopes of achieving economies of scale
The amount of money available in the economy:
A. is managed by the Federal Reserve. B. varies depending on what is considered money. C. is called the money supply. D. All of these are true.
Which one of the following is not a major factor that contributed to large trade deficits in the United States in the period 2002-2007?
A. A declining saving rate coupled with a rising investment rate in the U.S. B. A U.S. economy growing faster than its trading partners C. Large trade deficits with OPEC economies D. Flexible exchange rate between the U.S. dollar and the Chinese yuan