In the Steady State of Solow's Exogenous Growth Model, an Increase

question 64

Multiple Choice

In the steady state of Solow's exogenous growth model, an increase in total factor productivity

• A) increases output per worker and increases capital per worker.
• B) increases output per worker and decreases capital per worker.
• C) decreases output per worker and increases capital per worker.
• D) decreases output per worker and decreases capital per worker.
• E) decreases in output per worker only.

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Definitions:

Firms

Firms refer to business entities or organizations that produce goods or provide services with the aim of making a profit.

Industry

A sector of the economy that is made up of manufacturing, production, or provision of services within a specific domain of activity or expertise.

Marginal Revenue

The supplementary income received from the sale of an additional unit of a product or service.