New growth theory economists believe that:
I. Economic growth can continue as long as we keep finding new ideas.
II. The marginal product of capital diminishes very rapidly, so we must rely upon technological advances to create economic growth.

Question

Quizplus · Accepted Answer

New growth theory posits that economic growth can indeed continue indefinitely if we keep generating new ideas, which drive technological advances and improvements in productivity. It does not necessarily assert that the marginal product of capital diminishes very rapidly, but rather emphasizes the role of ideas and innovation in sustaining economic growth.

New Growth Theory Economists Believe That