According to new growth theory
A)physical capital is nonexcludable.
B)knowledge capital is excludable.
C)knowledge capital is subject to increasing returns.
D)knowledge capital is rival and excludable.

Question

Quizplus · Accepted Answer

According to new growth theory, knowledge capital is subject to increasing returns. This means that as more knowledge is used in production, the return on that knowledge increases, leading to even more knowledge being used in production, and so on. This is the key driver of long-term economic growth, as opposed to the traditional understanding that growth is driven solely by physical capital accumulation. Knowledge capital is also often considered to be non-excludable and non-rival, unlike physical capital.

According to New Growth Theory