In the Solow Growth Model

question 62

Multiple Choice

In the Solow growth model,

• A) higher total factor productivity results in no long-run change in consumption per capita.
• B) higher consumption per capita causes the population to increase.
• C) a country with higher total factor productivity has higher per capita income.
• D) business cycles explain differences in income per capita across countries.
• E) the model predicts that growth ultimately stops and all countries look the same.

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Definitions:

Merchantable Quality

Refers to the basic level of quality and functionality that consumers can reasonably expect from a specific good being sold.

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Encumbrances

Legal claims or liens on a property or asset that may affect the title or restrict the owner's ability to use the property freely.