The AK model is important because:
A) investment is indeed the primary source of all economic growth.
B) technological progress can make the economy behave as if it had an AK production function.
C) in the long run, there are no diminishing returns.
D) all factors are essentially reproducible in some form.

Question

Quizplus · Accepted Answer

The AK model argues that technological progress can lead to an economy behaving as if it had an AK production function, meaning that there are no diminishing returns in the long run. However, it does not necessarily hold that investment is the primary source of economic growth or that all factors are reproducible.

The AK Model Is Important Because