In the traditional view, which of the following production processes is considered when studying economic growth?
A)constant returns
B)increasing returns
C)diminishing returns
D)diminishing returns for low levels of capital, and increasing returns for high levels of capital

Question

Quizplus · Accepted Answer

The traditional view of economic growth includes the concept of diminishing returns, which suggests that as more units of capital and labor are added to the production process, the marginal product of each additional unit of capital or labor decreases. This concept helps explain why growth rates tend to slow down as economies become more developed and have less room for capital and labor to expand.

In the Traditional View, Which of the Following Production Processes