According to the endogenous growth theory,

Question

Quizplus · Accepted Answer

According to endogenous growth theory, the primary source of growth is not population growth or capital growth alone, but rather the productivity of capital. Unlike in the neoclassical growth theory, where the marginal productivity of capital (MPK) decreases as capital stock increases, in endogenous growth theory, MPK need not decrease and may even increase as capital stock increases. This is because research and development and other investments in human capital can lead to technological advancements that enhance the productivity of capital. Therefore, choice (C) is the correct answer.

According to the Endogenous Growth Theory