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Author Question: Why is investing in technology a better option than investing in labor or capital as a means to ... (Read 154 times)

fasfsadfdsfa

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on: Jun 30, 2018
Why is investing in technology a better option than investing in labor or capital as a means to sustained growth?
 
  What will be an ideal response?

Question 2

Suppose you pay 290.00 for a new tablet computer. This is an example of
 
  A) money as a store of value. B) money as a standard of deferred payment.
  C) barter. D) money as a medium of exchange.


Mholman93

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Reply #1 on: Jun 30, 2018
Answer to Question 1

The main reason why investing in technology is a better option than investing in labor or capital as a means to sustained growth is that investing in labor and capital is subject to diminishing marginal product. This implies that the additional output generated by investing in an extra unit of capital or labor diminishes as we have more of capital and labor. Hence, growth cannot be sustained by investing only on labor or capital. On the other hand, investment in technology builds on previous stocks of technology. Hence, technological growth is exponential in nature.

Answer to Question 2

D


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