If the rate of technical progress decreases, then the growth
A)of the labor force will decrease.
B)of the capital stock will decrease.
C)rate of potential GDP will decrease.
D)rate of unemployment will decrease.

Question

Quizplus · Accepted Answer

Technical progress is a key factor in increasing the productivity of the labor force and capital stock. If the rate of technical progress decreases, the potential output of the economy will decrease, resulting in a decrease in the rate of potential GDP growth. The labor force and capital stock may still grow, but their productivity will not increase as much without technological advancements. The rate of unemployment may or may not be affected by this change, depending on the specific circumstances. Therefore, option C is the correct answer.

If the Rate of Technical Progress Decreases, Then the Growth