In the two-sector endogenous growth model, income growth persists because:
A) the production function shifts exogenously.
B) the saving rate exceeds the rate of depreciation.
C) the creation of knowledge in universities never slows down.
D) the fraction of the labor force in universities is large.

Question

Quizplus · Accepted Answer

In the two-sector endogenous growth model, persistent income growth is driven by continuous knowledge creation, which is typically modeled as occurring in universities or research sectors.

In the Two-Sector Endogenous Growth Model, Income Growth Persists Because