The Result That the Growth Rate of Output Per Worker

question 60

Multiple Choice

The result that the growth rate of output per worker is equal to 1.43 × is ________.

• A) true of the Solow model only
• B) true of both the Solow model and the Romer model
• C) true of the Romer model only
• D) true under the common-law legal system only

---

Definitions:

Risk-Adjusted Rates

In capital budgeting, a rate used in place of the cost of capital to reflect especially risky projects.

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Certainty Equivalent NPV

A method of valuing risky projects or investments by adjusting the expected cash flows to reflect the investor's risk aversion, providing a 'risk-free' net present value.

Cost of Capital

The minimum return on investment a business necessitates to uphold its market value and entice financial inflow.