Answer to Question #51252 in Macroeconomics for bob

Question

State True, False or Uncertain. Neoclassical growth theory tells us that the widespread adoption of new technologies will increase potential GDP and potential GDP per worker.

Answer 1

False. Neoclassical growth theory tells us that real GDP per person grows because technological change induces a level of saving and investment that makes capital per hour of labour grow. Growth ends only if technological change stops.