Case Interview Prep

Answer: A - Longer years of training and education are an investment that increases the economic output per worker permanently.

Key Takeaway: The endogenous growth theory postulates that the process of growth can bypass diminishing returns by turning growth from exogenous to endogenous. Higher investment in such things as education and training promise an increase in the economic output per worker, with the assumption that there would be no diminishing returns. This permanent increase in productivity is specific to only certain investments such as those in human capital.