How does research and development contribute most to productivity growth?
A) through its effect on quantity of labour available
B) through its effect on quantity of capital goods available
C) through its effect on quality of labour available
D) through its effect on quality of capital goods available

Question

How does research and development contribute most to productivity growth?  
A) through its effect on quantity of labour available 
B) through its effect on quantity of capital goods available 
C) through its effect on quality of labour available 
D) through its effect on quality of capital goods available

Quizplus · Accepted Answer

Research and development leads to improvements in the quality of capital goods, such as new technologies, machines, and equipment, which in turn can increase productivity. This includes automation, which can reduce the need for labor while improving output. Quality improvements of labor through training and education also contribute, but the impact is generally smaller compared to improvements in capital goods. Quantity of labor and capital goods may increase with research and development, but their impact on productivity growth is limited without improvements in quality.

How Does Research and Development Contribute Most to Productivity Growth