Question #12
Reading: Reading 6 Economic Growth
PDF File: Reading 6 Economic Growth.pdf
Page: 6
Status: Unattempted
Correct Answer: A
Question
The endogenous growth theory contends that economic growth is a function of which of the following two economic variables?
Answer Choices:
A. Real interest rates and technological change
B. The subsistence real wage and real interest rates
C. The creation of knowledge capital and real interest rates
Explanation
The endogenous growth theory holds that productivity growth is a function of society's
ability to discover new products and methods (i.e., the creation of knowledge capital), and
real interest rates.