In new growth theory, growth in real GDP per person occurs because i. human capital grows indefinitely.
Ii) technology advances as a result of choices individuals make.
Iii) profit incentives encourage technological change.

Question

Quizplus · Accepted Answer

New growth theory argues that growth in real GDP per person occurs due to a combination of factors. Human capital accumulation (i) is necessary for sustained economic growth as it increases the productivity of individuals. Technological progress (ii) is driven by the choices of individuals and firms seeking profit incentives (iii). All three factors are interrelated and contribute to long-term economic growth. Therefore, the correct answer is E, i.e., all three options are correct.

In New Growth Theory, Growth in Real GDP Per Person