Question 25 O Mark this question Which statement below is true regarding sustainable economic growth? It means that we will be able to maintain our level of production only for a short time. It is not possible to produce at a level of production that is sustainable. Technological developments can increase the level of sustainable production. The level of production during a recession is not sustainable
The Correct Answer and Explanation is:
The correct answer is: Technological developments can increase the level of sustainable production.
Explanation
Sustainable economic growth refers to the rate at which a country’s economy can grow over the long term without causing significant problems like accelerating inflation or the depletion of natural resources. It is fundamentally linked to the growth of an economy’s potential output, which is the maximum amount of goods and services an economy can produce when all its resources, such as labor and capital, are fully and efficiently employed.
The statement that technological developments can increase the level of sustainable production is correct because technology is a primary driver of productivity growth. When new technologies are introduced, they allow an economy to produce more output with the same amount of inputs or the same output with fewer inputs. For example, the invention of the assembly line, the development of powerful computer software, or innovations in renewable energy all enable firms to become more efficient.
This increase in efficiency expands the economy’s production possibilities. In economic terms, technological progress shifts the production possibilities frontier (PPF) outward. This means the overall capacity of the economy has grown, allowing for a higher level of production to be sustained over time without straining resources and triggering high inflation.
Let’s examine why the other options are incorrect. The idea that sustainable production is only for a short time is a direct contradiction of the term’s meaning. Sustainability inherently implies long term viability. The claim that it is impossible to produce at a sustainable level is also false; economies are always striving to operate at their potential, or sustainable, output level. Finally, during a recession, the level of production is actually below the sustainable potential, characterized by high unemployment and underused factories. The problem is too little production, not an unsustainably high level.
