When economists view technological change as internal to the economy, they mean that it
A) occurs randomly.
B) occurs accidentally.
C) arises deliberately from the profit motive and competition.
D) arises mainly from government subsidies.

Question

Quizplus · Accepted Answer

Technological change is viewed as internal to the economy because it arises deliberately from the profit motive and competition. Firms have an incentive to develop new technologies to increase their profitability and gain a competitive advantage in the market, which leads to the creation and adoption of new technologies. Government subsidies may support technological change, but they are not the main driver of it. Random or accidental changes may occur, but they are not considered the primary source of technological change in an economy.

When Economists View Technological Change as Internal to the Economy