Which statement best describes how technology influences productivity and economic prosperity?

• A. It slows production and increases unemployment.
• B. It improves efficiency, creates new products, reduces costs, and raises living standards.
• C. It only changes consumer preferences without affecting productivity.
• D. It guarantees permanent economic growth regardless of other factors.

Answer: (B)

Technology increases productivity by making production more efficient and by enabling the creation of new goods and services. When firms adopt better methods, smarter tools, and improved information systems, they can produce more output with the same resources or the same output with fewer resources. This lowers costs and often boosts profits, which can be reinvested to expand production and hire more workers. At the same time, innovation leads to new products and markets, creating additional opportunities for growth and employment. With higher efficiency and cheaper goods, living standards tend to rise as real incomes increase and prices fall.

That’s why the statement describing technology as improving efficiency, creating new products, reducing costs, and raising living standards is the best description of its impact on productivity and economic prosperity.