According to the Solow Model, with Constant Technology, an Increase

question 62

Multiple Choice

According to the Solow model, with constant technology, an increase in capital per worker will lead to a smaller increase in GDP per capita. This is explained by:

• A) constant returns to scale.
• B) the law of diminishing marginal returns.
• C) the law of diminishing marginal utility.
• D) decreasing returns to scale.

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Definitions:

Accounting Equation

The foundational formula in accounting representing assets equal to the sum of liabilities and shareholders' equity.

Initial Investment

The initial amount of money spent to start a project, purchase an asset, or invest in a business venture.

Accounting Equation

The foundational principle of accounting that states assets equal liabilities plus equity.

Accounts Payable

Liabilities representing amounts owed by a company to creditors for purchases of goods and services on credit.