In the Solow Model with Technological Progress, by Increasing the Efficiency

question 73

Multiple Choice

In the Solow model with technological progress, by increasing the efficiency of labor at rate g:

• A) the real wage and the real rental price of capital both grow at rate g.
• B) the real wage grows at rate g but the real rental price of capital is constant.
• C) the real wage is constant but the real rental price of capital grows at rate g.
• D) both the real wage and the real rental price of capital are constant.

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