In the long run,by increasing total factor productivity,technological progress
A) reduces both the capital utilization rate and the level of employment
B) creates unemployment
C) prevents the economy from going into a steady state
D) raises the steady-state capital stock
E) reduces the capital-labor ratio

Question

Quizplus · Accepted Answer

As technological progress increases total factor productivity, it allows for more output to be produced with the same amount of inputs (including capital). This means that firms can produce more goods with the same amount of capital stock, which leads to an increase in the steady-state capital stock. Thus, the answer is D.

In the Long Run,by Increasing Total Factor Productivity,technological Progress