Impact of Technology Investment on Productivity

Medium Economic Growth And Development Productivity

In the context of economic growth, productivity refers to the efficiency with which goods and services are produced within an economy. It is critical for understanding both the growth trajectory of a country and the overall standard of living of its citizens. For a small, open economy that has recently increased its investment in technology, which of the following statements accurately reflects the potential impact on productivity levels?

Increasing investment in technology typically leads to higher productivity by allowing for more efficient production processes, thus reducing overall costs.

Higher technology investment will always lead to immediate increases in productivity, irrespective of the existing workforce skills.

Investment in technology can lower productivity initially due to potential disruption and adjustments needed in the workforce.

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