Due to diminishing marginal returns,the ultimate source of economic growth in Canada over the past 50 years has been

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Quizplus · Accepted Answer

Diminishing marginal returns means that adding more capital or labour will eventually lead to smaller increases in output. Thus, the ultimate source of economic growth must come from something else: total factor productivity (TFP). TFP measures the efficiency with which capital and labour are used in production, and improvements in TFP can lead to sustained economic growth even in the face of diminishing marginal returns from capital and labour. This has been the case in Canada over the past 50 years, where TFP has been the main driver of economic growth.

Due to Diminishing Marginal Returns,the Ultimate Source of Economic Growth