One of the long-term potential problems in getting an economy to increase its living standards in the Solow growth model is that:

Question

Quizplus · Accepted Answer

According to the Solow growth model, increasing consumption today will come at the expense of investment and savings, which are necessary for long-term economic growth. If current generations prioritize consumption over investment and savings, it can lead to a reduction in the rate of economic growth and a lower standard of living for future generations. Therefore, current generations need to be willing to sacrifice some of their consumption for the benefit of future generations by investing and saving for the long-term growth of the economy.

One of the Long-Term Potential Problems in Getting an Economy