- CFA Exams
- CFA Level I Exam
- Study Session 4. Economics
- Reading 11. Economic Growth and the Investment Decision
- Subject 5. Theories of Growth
CFA Practice Question
The view that economic growth results from incentives to innovate and from capital that does not experience diminishing returns is ______.
A. classical growth theory.
B. neoclassical growth theory.
C. endogenous growth theory.
Explanation: The theory holds that real GDP per person grows because of large positive externalities or spillover effects from R&D expenditures, and that growth can persist indefinitely.
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