A Key Assumption of the Solow Model Is

question 148

Multiple Choice

A key assumption of the Solow model is

• A) increasing returns to labor and diminishing returns to capital.
• B) diminishing returns to capital only.
• C) diminishing marginal product of capital and labor.
• D) diminishing marginal product of capital and increasing marginal product of labor.
• E) constant marginal product of capital only.

---

Definitions:

Investee

A company or entity in which an investor holds a minority ownership stake or interest, but not controlling interest.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership stake in a company, with voting rights and potential for dividends.

Short-Term Investment

Financial assets that are expected to be converted into cash or sold within one year or within the current business cycle.

Common Stock

A type of equity security that represents ownership in a corporation, usually with voting rights.