Hypotheses to explain the positive correlation between factor accumulation and production efficiency include each of the following except:
A)the quality of a nation's institutions influences both factor accumulation and production
B)efficiency. capital accumulation causes greater production efficiency.
C)efficient economies make capital accumulation unnecessary.
D)an efficient economy encourages capital (including human capital) accumulation.

Question

Quizplus · Accepted Answer

The other three options provide plausible explanations for the positive correlation between factor accumulation and production efficiency, but option C suggests that efficient economies do not require factor accumulation to achieve high levels of production efficiency. This runs counter to the premise of the question, which assumes a positive correlation between the two variables.

Hypotheses to Explain the Positive Correlation Between Factor Accumulation and Production