Hypotheses to explain the positive correlation between factor accumulation and production efficiency include each of the following except:
A) the quality of a nation's institutions influences both factor accumulation and production efficiency.
B) capital accumulation causes greater production efficiency.
C) efficient economies make capital accumulation unnecessary.
D) an efficient economy encourages capital (including human capital) accumulation.

Question

Quizplus · Accepted Answer

This statement contradicts the positive correlation between factor accumulation (including capital accumulation) and production efficiency, as it suggests that efficient economies do not require capital accumulation to be productive. Therefore, it cannot be a hypothesis to explain the positive correlation. The other answer choices all offer explanations for why factor accumulation and production efficiency are positively correlated.

Hypotheses to Explain the Positive Correlation Between Factor Accumulation and Production