Choose the following option: Q#3) Consider the U.S. economy during two historical periods. The first is from 1870 to 1980 – the era of integrated steel and car production, with coal mines, steel mills and car factories. The second is from 1980 until today – 2020 – the era of computing and biotechnology, with software, artificial intelligence and lab research. A major shift in the sources of labor productivity growth occurred that reflect a greater emphasis on: (a) tangible physical capital (b) intangible knowledge capital
Choose the following option:
Q#3) Consider the U.S. economy during two historical periods. The first is from
1870 to 1980 – the era of integrated steel and car production, with coal mines,
steel mills and car factories. The second is from 1980 until today – 2020 – the
era of computing and biotechnology, with software, artificial intelligence and
lab research. A major shift in the sources of labor productivity growth occurred
that reflect a greater emphasis on:
(a) tangible physical capital (b) intangible knowledge capital
Q#4) Consider a poor country with an under-developed economy which could invest
trillions into its current capital stock – either moving “up” its current productivity
“curve” (PC) or shifting to a new and higher productivity (PC) curve. Which
approach is likely best for increasing the country’s living standards (Real
Per Person) through time?
(a) A continuous build-up of the current capital stock with established technology
will achieve more – capital “deepening” with more capital for each worker.
(b) R&D that supports “cutting edge” invention and innovation will propel labor
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