2 The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s, but eventually this growth slowed. Why did this occur? Capital per hour worked (labor) grew rapidly from 1950 to 1980, but technological change occurred very slowly. Capital per hour worked (labor) grew slowly, but technological change grew very rapidly. Increasing implementation of new technologies eventually suffered diminishing marginal returns. The centrally planned economy invested too heavily in technological change. Consumption goods eventually took priority.

2 The Soviet Union's economy grew rapidly in terms of GDP per hour worked in the 1950s, but eventually this growth slowed. Why did this occur? Capital per hour worked (labor) grew rapidly from 1950 to 1980, but technological change occurred very slowly. Capital per hour worked (labor) grew slowly, but technological change grew very rapidly. Increasing implementation of new technologies eventually suffered diminishing marginal returns. The centrally planned economy invested too heavily in technological change. Consumption goods eventually took priority.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Economic Growth: Resources, Technology, Ideas And Institutions

Section: Chapter Questions

Problem 2WNG

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