The Solow Growth Model Predicts That Aggregate Output

question 25

Multiple Choice

The Solow growth model predicts that aggregate output

• A) will grow at the rate of the labour force growth in the long run.
• B) will grow at the rate of the population growth in the long run.
• C) will grow at the rate of the growth in capital per worker in the long run.
• D) will grow at the rate of the growth in income per worker in the long run.
• E) will be maximized in the long run.

---

Definitions:

Voucher

A document that serves as evidence for a transaction and authorizes the payment or receipt of money.

Normal Balance

The side of an account (debit or credit) that is expected to have a higher balance based on the accounting rules.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, typically including balance sheet, income statement, and cash flow statement.

Normal Balance

The side (debit or credit) of an account that is usually increased. For example, assets have a normal debit balance, while liabilities have a normal credit balance.