Final answer:
Economists mean that improvements in technology encompass innovations and better methods of production and efficiency that boost productivity and a nation's GDP.
Step-by-step explanation:
When economists refer to improvements in technology, they are talking about innovations and progress in methods of production and efficiency that increase a nation's ability to produce goods and services for a given population. These technological advancements are not limited to the creation of new gadgets or an increase in per capita productivity, but also include advances in physical capital, such as machinery and equipment, which enhance how effectively work can be performed. Moreover, technological progress incorporates advancements in human capital through higher education or skills training, all contributing to productivity growth and, as a result, to an increase in real GDP.
An example of technology improving productivity is the transition from using a typewriter to using a laptop with word processing software for typing a term paper. Additionally, innovations like GPS technology and Universal Product Codes have significantly streamlined the process for firms to manage inventories and distribution, enhancing efficiency on a broad scale.