Better ideas increase output directly because of higher productivity and indirectly because of capital accumulation.

Name: Better ideas increase output directly because of higher productivity and indirectly because of capital accumulation.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Better ideas lead to increased productivity which directly increases output. Additionally, as productivity increases, firms can save more money and invest in capital accumulation (e.g. new technology or equipment), which leads to even more output in the long run.

Better Ideas Increase Output Directly Because of Higher Productivity and Indirectly