The method of constructing a measure of technological progress relies on which of the following assumptions?
A) The investment rate does not change.
B) Population growth is zero.
C) Each factor of production is paid its marginal product.
D) Population growth does not change.
E) The saving rate does not change.

Question

Quizplus · Accepted Answer

The method of constructing a measure of technological progress relies on the assumption that each factor of production is paid its marginal product. This assumption ensures that the returns to factors of production are equal to the value that they contribute to output, thereby allowing for an accurate assessment of the technological progress that has been made. The other choices (A, B, D, and E) are not relevant to this particular assumption.

The Method of Constructing a Measure of Technological Progress Relies