In the Solow Growth Model in the Long Run or Steady

question 14

Multiple Choice

In the Solow growth model in the long run or steady state, an increase in the labour input L(0) will,

• A)decrease the capital stock.
• B)lead to a positive growth of the capital stock per worker.
• C)not change real output per worker.
• D)all of the above.

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Definitions:

Negative

In finance and economics, refers to a condition or a situation where the figures or the outcomes are less than zero, indicating a loss or decrease.

Decreasing

Refers to a process or trend where quantities or values are going down or diminishing over time.

Slope

In mathematics, a measurement of the steepness, incline, or grade of a line, typically expressed as a ratio of vertical change to horizontal change.

Value

The importance or utility that something has for an individual or the market price of a good or service.