A Key Assumption in an Endogenous Growth Model with Both

question 37

Multiple Choice

A key assumption in an endogenous growth model with both labor and capital inputs in the production function is that

• A)the share of capital is larger than the share of labor
• B)the share of capital and labor have to be equal
• C)better technology is a byproduct of more capital investment
• D)there are no external returns to capital
• E)long-run growth comes solely from technological progress

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Definitions:

Indirect

Pertains to a cost or effect that is not directly traceable to a specific cause, object, or activity, often referring to overhead costs in a business setting.

Machine Maintenance

The process of keeping machines and equipment in optimal working condition by performing regular checks, repairs, and replacements as needed.

Labor

The physical and mental effort provided by individuals in the production of goods and services.

Indirect

Expenses or actions that are not directly tied to a specific product, service, or activity but are necessary for the general operation of a business, such as utilities or management salaries.