Question

Suppose that Bolivia has recently experienced an increase in its growth rate, although the total quantity of inputs in the country has remained unchanged. This growth may have been caused by Choose one or more: A. a random increase in demand. B. a change in technology. C. devotion to the rule of law after years of lawlessness. D. a decrease in exports. E. an increase in imports.

Answer 1

Answer: Option B

Explanation: In simple words, economic growth refers to a situation when an economy produces more output in the current year as compared to the previous year.

The economic growth could happen from a number of factors. However in the given case, the growth in output is happening without any increase in input. This can only occur when the technology has been improved or the labor productivity has been increased.

Only under the above instances one can have more output than the previous level without increasing the input.

Hence from the above we can conclude that the correct option is B.