Which of the following factors contributes to GDP growth?

Study for the Investment Funds in Canada (IFIC) Exam. Use flashcards and multiple-choice questions with hints and explanations. Prepare effectively for your certification!

The choice of improvement in technology as the factor contributing to GDP growth is accurate because technological advancements typically lead to increased productivity and efficiency within the economy. When new technologies are developed and implemented, they can enhance the capabilities of workers, streamline processes, and reduce costs. This, in turn, can result in higher output levels of goods and services, which are critical components of GDP.

Moreover, improved technology often fosters innovation, opening new markets and creating new industries. For example, advancements in information technology have transformed many sectors, including communications, healthcare, and manufacturing, leading to overall economic expansion.

GDP growth is fundamentally driven by increases in the productive capacity of an economy, and technology plays a pivotal role in facilitating that capacity enhancement. As businesses adopt new technologies, they can produce more efficiently, thereby contributing to a stronger economy and higher GDP figures.

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