In the Solow growth model, capital exhibits ______ returns. In the basic endogenous growth model, capital exhibits ______ returns.

Question

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In the Solow growth model, capital exhibits diminishing returns, meaning that as more capital is added, the additional output produced from an extra unit of capital decreases. In contrast, the basic endogenous growth model assumes constant returns to capital, implying that additional units of capital increase output at a constant rate, which supports sustained long-term economic growth without diminishing returns.

In the Solow Growth Model, Capital Exhibits ______ Returns