Which of the following is less likely to affect the rate of economic growth?

• A. Improvements in technology
• B. Increases in the labor force
• C. Growth in physical capital investment
• D. Changes in consumer preferences for different goods

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the concept of economic growth, which refers to the increase in the output of goods and services in an economy over time, typically measured by the growth rate of real GDP.
2. Step 2: Identify the main factors that influence economic growth, commonly including improvements in technology, increases in the labor force, and growth in physical capital investment, as these directly enhance productive capacity.
3. Step 3: Analyze how improvements in technology lead to more efficient production methods, thereby increasing output and contributing positively to economic growth.
4. Step 4: Recognize that increases in the labor force provide more workers, which can increase total production and thus support economic growth.
5. Step 5: Understand that growth in physical capital investment means more machinery, infrastructure, and equipment, which raises the economy's productive potential and promotes growth, whereas changes in consumer preferences mainly affect the composition of demand rather than the overall growth rate.