Which of the following changes would lead,according to the Solow model,to a higher level of long-run output per worker?
A)A lower level of capital per worker
B)An increase in the saving rate
C)A rise in the rate of population growth
D)A decrease in productivity

Question

Quizplus · Accepted Answer

According to the Solow model, an increase in the saving rate leads to more investment in capital and a higher level of long-run output per worker. A lower level of capital per worker (choice A) would actually lead to lower output per worker. A rise in the rate of population growth (choice C) would lead to more workers and therefore more output, but it would also lead to less capital per worker and potentially lower output per worker. A decrease in productivity (choice D) would also lead to lower output per worker.

Which of the Following Changes Would Lead,according to the Solow