Unlike the long-run classical model in Chapter 3, the Solow growth model:
A) assumes that the factors of production and technology are the sources of the economy's output.
B) describes changes in the economy over time.
C) is static.
D) assumes that the supply of goods determines how much output is produced.

Question

Quizplus · Accepted Answer

The Solow growth model describes changes in the economy over time, including how a country's gross domestic product (GDP) per capita grows, its rate of savings and investment, and its population growth. It is a dynamic model that focuses on the long-run steady state equilibrium. Unlike the classical model, the Solow model assumes that both factors of production - capital and labor - and technology are the sources of an economy's output.

Unlike the Long-Run Classical Model in Chapter 3, the Solow