Final answer:
The substantial increase in U.S. GDP over the past century can be attributed to improved technological advancements, a larger and more educated population, and substantial growth in physical capital per worker. These factors have collectively enhanced productivity and efficiency within the U.S. economy.
Step-by-step explanation:
The U.S. GDP is significantly higher today than 50 or 100 years ago primarily due to: improved technological advancements, increased population, development of higher education levels, and growth in physical capital.
Technological advancements have been vital in bolstering efficiency and productivity. From the invention of automobiles and airplanes to the development of computers and smartphones, technology has revolutionized how work is conducted. The sheer volume of patents issued annually, often exceeding 150,000, showcases the rapid pace of innovation.
An increase in population also contributes to economic growth, expanding the labor force and consumer base. The U.S. population has more than tripled since the early 1900s, which correlates with a growth in GDP.
Furthermore, the rise in education is pivotal. In 1900, a fraction of the U.S. population completed high school or college. By 2010, 87% had a high school diploma, and over 29% held a four-year college degree. By 2014, the percentage of working-age Americans with a college degree reached 40%, signaling a substantial increase in human capital.
The average amount of physical capital per worker has significantly increased, meaning that each worker now has more and better tools at their disposal.