The endogenous growth models based on equipment investment and learning-by-doing assume that technological progress enters the neoclassical production function as:
A) the result of intentional R&D activity by profit-motivated producers.
B) the result of investment in human capital.
C) an increase in the quantity of the factors.
D) an externality.

Question

Quizplus · Accepted Answer

Endogenous growth models based on equipment investment and learning-by-doing assume that technological progress is an externality, meaning that it is not directly controlled or intentionally pursued by profit-motivated agents but rather arises through interactions in the economy. As such, it is exogenous to the behavior of individual agents and can be modeled as a result of spillovers or external knowledge diffusion.

The Endogenous Growth Models Based on Equipment Investment and Learning-By-Doing