In the Solow growth model, a country can grow at a higher rate than the population growth rate if

Question

Quizplus · Accepted Answer

According to the Solow growth model, a country can grow at a higher rate than the population growth rate if capital per worker is below its steady state level. This is because as capital per worker increases, the marginal product of capital decreases, leading to diminishing returns. However, if the capital per worker is below its steady state level, increasing capital per worker will lead to an increase in productivity and thus economic growth.

In the Solow Growth Model, a Country Can Grow at a Higher