If We Hold Ideas,education,and Labor Constant in the Solow Model,then

question 73

Multiple Choice

If we hold ideas,education,and labor constant in the Solow model,then output (GDP) is a function of:

• A) human capital only.
• B) physical capital only.
• C) labor only.
• D) technological knowledge only.

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Definitions:

Crowding-In Effect

An economic theory suggesting that increased government spending leads to an increase in private sector investment.

Government Spending

Expenditures made by the government sector including spending on goods and services, public projects, and transfer payments.

Economic Expansion

A phase in the business cycle where the economy grows and increases in activity.

Budget Deficits

Occurs when a government's expenditures surpass its revenues during a given period, leading to borrowing or use of saved funds.