Which of the following best describes the relationship between economic growth and literacy?
(A) As the economy grows, literacy declines because it becomes less and less useful in a developed economy.
(B) Increased literacy initially stimulates economic growth by raising labor productivity, but as the economy grows
and the opportunity cost of education rises, literacy declines.
© Increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people
(D) There is no correlation between economic growth and literacy.

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UpStudy AI · Accepted Answer

1. We begin by considering how literacy might affect economic growth. Increased literacy increases labor productivity because a more educated workforce can work more efficiently and adopt new technologies quicker. This is often represented as an increase in productivity $$ P $$. For example, if we denote labor productivity as $$ L $$ and education as $$ E $$, an increase in $$ E $$ leads to a higher $$ L $$, which in turn, supports higher economic growth.

2. Next, we evaluate each option:

- **(A)** suggests that as the economy grows, literacy declines. However, it is widely accepted that a growing economy incentivizes more investment in education because literacy enhances labor productivity.
   
   - **(B)** states that increased literacy initially stimulates economic growth by raising labor productivity, but later, as the economy grows, the opportunity cost of education increases and literacy declines. There is no strong empirical evidence supporting a decline in literacy after initial economic growth.
   
   - **(C)** explains that increased literacy stimulates economic growth by raising labor productivity, and as the economy grows, people continue to pursue education and literacy improves further. This reflects the positive feedback loop where economic growth and literacy reinforce each other.
   
   - **(D)** claims there is no correlation between economic growth and literacy, which contradicts the observed link between education and productivity improvements.

3. Given the explanation and analysis, answer **(C)** best describes the relationship because it encapsulates the positive, reinforcing interplay between literacy and economic growth.

Thus, the answer is:

$$ \boxed{	ext{(C)}} $$.
Increased literacy raises labor productivity, which stimulates economic growth. As the economy grows, people continue to pursue education, further improving literacy.

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