chunty

Technological progress is most extensively applied to which of the following?

A) The developments in human capital.

B) Improvements in the productivity of physical capital.

C) The creation of investment opportunities and savings incentives.

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While the most all-encompassing and powerful technologies are the development of human capital (written and spoken language, science, and mathematics) most technological progress involves improvements in the productivity of physical capital.

chunty

Which of the following activities provides the least significant contribution to economic growth?

A) Discovery of new technologies.

B) Increased consumer spending.

C) Savings and investment in new capital.

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Three activities are necessary to result in persistent economic growth:

• Savings and investment in new capital increase labor productivity, which is defined as real GDP per labor hour. Saving and investment in new capital increases the level of capital per worker.
• Investment in human capital is the investment in people’s skills and knowledge, leading to productivity improvements and technological advances.
• Discovery of new technologies contributes to sustained economic growth by making human capital and physical capital more productive.

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