A key idea of the new growth theory is that
A) technology is not an important determinant of economic growth.
B) economic growth is not as important as leisure time growth.
C) the greater the rewards for technological advances, the greater the number of technological advances.
D) the rewards associated with technological advances have little to do with the actual rate of invention or innovation.

Question

Quizplus · Accepted Answer

The new growth theory emphasizes the role of technological advances in promoting long-run economic growth. According to the theory, technological progress can lead to increasing returns to scale and promote further innovation by providing firms with more opportunities for profitable investment. This implies that the greater the rewards for technological advances, the greater the number of technological advances, which is consistent with choice C.

A Key Idea of the New Growth Theory Is That