An implication of the Solow model is that,once an economy reaches the steady state,
A)long-term growth continues indefinitely.
B)long-term growth does not continue.
C)long-term growth accelerates.
D)long-term growth decelerates.
E)None of the above is correct.

Question

Quizplus · Accepted Answer

The Solow model suggests that in the long run, economies will reach a steady state where capital stock and output per worker stop growing. This means that long-term growth does not continue indefinitely, as the economy has reached its maximum potential output level given its resources and technology.

An Implication of the Solow Model Is That,once an Economy