Question #18

Reading: Reading 6 Economic Growth

PDF File: Reading 6 Economic Growth.pdf

Page: 9

Status: Unattempted

Correct Answer: B

Part of Context Group: Q17-18
Shared Context
- Which economist is mostly applying neoclassical theory when stating her concerns? A) Economist #3. B) Economist #2. C) Economist #1.
Question
For Surico, the education investment that may increase the growth rate of potential GDP is the one that would increase:
Answer Choices:
A. application of technology to increase TFP and productivity of labor
B. non-ICT capital to increase capital deepening
C. research and development to increase TFP
Explanation
Surico is a developed country. It is not likely to benefit much from capital deepening and application of technology. Innovations and research and development can increase the total factor productivity which is more likely to increase the impact of growth in potential GDP.
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