In the Solow Growth Model, the Assumption of Constant Returns

question 35

Multiple Choice

In the Solow growth model, the assumption of constant returns to scale means that:

• A) all economies have the same amount of capital per worker.
• B) the steady-state level of output is constant regardless of the number of workers.
• C) the saving rate equals the constant rate of depreciation.
• D) the number of workers in an economy does not affect the relationship between output per worker and capital per worker.

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Definitions:

Random

Lacking any definite plan, purpose, or pattern, often used in the context of selection or occurrence.

First Serves

In tennis, the initial serve attempt in a point, which, if successful, initiates the rally.

Probability

The mathematical likelihood of a specific event occurring, often expressed as a number between 0 and 1.

Independent Events

Two or more events whose occurrence or outcome do not affect each other's probability of happening.