Which of the following is NOT a reason for differences in per capita income in neoclassical growth theory?
A)All countries have the same production function.
B)Countries have different savings rates.
C)The slope of the steady-state investment line is different for different countries.
D)All of the above.

Question

Quizplus · Accepted Answer

Neoclassical growth theory assumes that all countries have the same production function, so per capita income differences cannot be attributed to variations in production technology. The theory does consider differences in savings rates and the slope of the steady-state investment line, which can affect steady-state levels of capital and output.

Which of the Following Is NOT a Reason for Differences