According to the endogenous growth theory
A)countries with the same technology and population growth eventually converge to the same steady-state growth rate independent of the savings rate
B)the steady-state growth rate decreases as the rate of accumulation of factors of production increases
C)the long-term growth rate of capital is not affected by the savings rate
D)the steady-state growth rate is affected by the rate at which the factors of production are accumulated
E)none of the above

Question

Quizplus · Accepted Answer

According to the endogenous growth theory, the steady-state growth rate is affected by the rate at which the factors of production (such as capital and knowledge) are accumulated. This means that the more these factors are accumulated, the higher the steady-state growth rate will be. Therefore, choice D is the correct answer. Choices A, B, and C are incorrect, as they all make statements that are contrary to the predictions of the endogenous growth theory.

According to the Endogenous Growth Theory