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 idea that the production function exhibits _______implies that ________
A) increasing returns; output should increase steadily as technology grows B) constant returns; each additional unit of labor employed generates an increasing amount of real GDP C) diminishing returns; the Lucas Wedge increases at output increases D) increasing returns; potential GDP is always increasing E) diminishing returns; each additional unit of labor employed generates an ever-decreasing amount of real GDP
Assume the analysis of Friedman and Phelps is correct, so that the following equation is valid: Unemployment rate = Natural rate of unemployment - a × (?ctual inflation - x). In this equation,
a. a is a parameter that measures how much actual inflation responds to expected inflation. b. a = 0 at the point of intersection of the short-run and long-run Phillips curves. c. x is the expected rate of inflation. d. All of the above are correct.
A leftward shift of a supply curve is called a(n):
A. decrease in quantity supplied. B. increase in supply. C. decrease in supply. D. increase in quantity supplied.
Aggregate surplus:
A. is the sum of total willingness to pay and total avoidable costs of production. B. is minimized under perfect competition. C. is the sum of consumer and producer surpluses. D. is equal to zero in the long run.