Describe the components of the new growth theory perpetual motion machine and explain the role played by incentives in keeping the machine in motion. Choose the correct statement. Profit incentives lead to innovations, new and better techniques, and more consumption goods and services. The standard of living rises and a population explosion occurs. The labour force increases and potential GDP increases. Even more consumption goods and services are produced and the economy grows further. Technology begins to advance at a more rapid pace, and these technological advances bring new profit opportunities. Businesses expand and the economy enjoys new levels of prosperity and growth. As long as technology advances, economic growth continues. Profit incentives lead to innovations, new and better techniques, and more consumption goods and services. New firms are formed and old firms die. New and better jobs are created. The result is a higher standard of living but people want an even higher standard of living and growth continues. Government incentives such as tax breaks lead to the production of more government goods and services. The result is higher income for those who receive these government contracts. Firms involved in government work turn to the private sector to make