What are the basic arguments of the neoclassical growth theory? ...

[panfilo]

What are the basic arguments of the neoclassical growth theory?
 
  What will be an ideal response?

Question 2

The principle of diminishing marginal utility means that as you eat fewer slices of pizza, your total utility from pizza will ________ and your marginal utility from each additional slice of pizza will ________.
 
  A) increase; decrease
  B) decrease; increase
  C) increase; increase
  D) decrease; decrease

[kjohnson]

Answer to Question 1

The neoclassical growth theory explains economic growth as the result of technological change. Technological change leads to a level of saving and investment that makes capital per hour of labor grow. Growth, therefore, only ends if technological change ends. However the theory looks at technological change as being the result of chance and luck and so offers no explanation for how or why technological change occurs.

Answer to Question 2

B

[panfilo]

Correct answers!

[kjohnson]

Great! Please up vote