Economists Andrew McAfee and Erik Brynjolfsson have written about “The Great Decoupling”-the divergence between productivity growth and employment. Since the mid-1990s, labor productivity and GDP have continued to increase, while employment and wages have remained stagnant. Using the concepts discussed in the chapter, which of the following reasons would explain an increase in productivity and GDP at a given level of employment? A. An decrease in the physical capital stock. B. Technological improvement. C. An increase in the marginal propensity to save. D. Population growth.
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