Question

Which best describes the growth process from its ultimate to its immediate causes?

factors of production → institutions → incentives → real GDP per capita
factors of production → incentives → institutions → real GDP per capita
institutions → incentives → factors of production → real GDP per capita
incentives → institutions → factors of production → real GDP per capita

Answer 1

factors of production → institutions → incentives → real GDP per capita

Step-by-step explanation:

• Factors of production like the land, capital and labor are considered as the economic factor of production as inputs that are used to production of output i.e finished goods and services.

• Then comes the institutions like the education systems, political systems, and legal systems into play that provide the institutional framework for the development of real GDP per capita.

• As the real GDP takes into account the inflation, rising prices, and impact of the average person per economy.