In the Solow growth model with technological progress in the optimal amount of capital per worker is
A)growing.
B)shrinking.
C)cyclical.
D)fluctuating.

Question

Quizplus · Accepted Answer

In the Solow growth model with technological progress, the optimal amount of capital per worker is growing because technological progress increases productivity and output per worker, which increases the demand for capital to maintain the steady state level of output per worker. This leads to an increase in the steady state level of capital per worker over time.

In the Solow Growth Model with Technological Progress in the Optimal