In the Solow growth model the economy reaches the optimal k*:
A)immediately.
B)over a period of time.
C)randomly.
D)cyclically.

Question

Quizplus · Accepted Answer

In the Solow growth model, the economy reaches the optimal capital per worker level - k* - as a result of the convergence process that occurs over time through investment, depreciation of capital, and technological progress. Therefore, the correct choice is B) over a period of time.

In the Solow Growth Model the Economy Reaches the Optimal