According to new growth theory, technological change is driven by ...

[jenna1]

According to new growth theory, technological change is driven by
 
  A) random chance.
  B) government policies.
  C) foreign firms' attempts to increase their sales in the domestic market.
  D) firms' attempts to increase their profit.

Question 2

How does the production of a U.S. firm located in France affect U.S. GDP? How does the production of a French firm located in Ohio affect U.S. GDP?
 
  What will be an ideal response?

[lou]

Answer to Question 1

D

Answer to Question 2

U.S. GDP includes all production in the United States, regardless of who owns the factors of production used. Therefore, the production by the U.S. firm in France won't be counted in U.S. GDP because the production does not take place in the United States. However, the production by the French firm in the United States will be counted as part of U.S. GDP because the production has taken place in the United States.