One of the implications of new growth theory is that economic growth arises from
A) more government spending, such as military spending.
B) investments in knowledge.
C) financial safety nets for the poor, such as Medicaid.
D) reductions in the birth rate.

Question

Quizplus · Accepted Answer

New growth theory emphasizes that economic growth is fueled by investments in knowledge, such as research and development, human capital, and technological innovation. This view differs from traditional growth theory, which focused mainly on increases in physical capital and labor. The other options listed do not directly contribute to economic growth according to new growth theory.

One of the Implications of New Growth Theory Is That