Question 41
Economic Growth and DevelopmentIf an economy grows at an annual rate of 6%, of which 4% is deemed to be due to improvement in the productivity of labour and capital combined, the remaining 2% is generally attributed to
- A.technical progress
- B.size of the population
- C.amount of natural resources
- D.the environment
- E.the quality of human resources
Show the answer and explanation
Answer: A (technical progress)
Explanation
Growth not explained by labour and capital (the 'residual') is credited to technical progress.