A striking conclusion of the Solow model is that in the absence of productivity growth,in the long run
A)the economy reaches a steady state.
B)consumption per worker equals the capital stock per worker.
C)consumption per worker equals output per worker.
D)consumption per worker equals investment per worker.

Question

Quizplus · Accepted Answer

The Solow model predicts that in the absence of productivity growth, the economy will eventually reach a steady state where the capital stock and output per worker remain constant over time. Therefore, Option A - "the economy reaches a steady state" - is the correct answer. Option B is incorrect because consumption per worker may be higher or lower than the capital stock per worker depending on the level of depreciation. Option C is untrue because in the long run the output per worker will also remain constant at the steady state level. Option D is wrong because investment per worker may fluctuate in the long run, depending on the level of depreciation, while consumption per worker remains constant at the steady state level.

A Striking Conclusion of the Solow Model Is That in the Absence