Which of the Following Statements Is Correct Regarding the Solow

question 80

Multiple Choice

Which of the following statements is correct regarding the Solow growth model?

• A) Increases in living standards will be achieved automatically in the long run.
• B) An increase in the saving rate will always result in a higher level of output per person.
• C) An increase in the saving rate will always result in a higher level of consumption per person.
• D) The optimal saving rate will be achieved as the community is no better off by additional saving.

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Definitions:

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, used in inventory valuation and other financial measurements.