In endogenous growth models,it is assumed that
A)there are external economies from public or private investments.
B)there are diminishing marginal returns to capital.
C)growth is explained by forces outside the model.
D)the capital-labor ratio is constant.

Question

Quizplus · Accepted Answer

Endogenous growth models assume that there are external economies from public or private investments, which contribute to economic growth. This is in contrast to exogenous growth models, which assume that growth is explained by forces outside the model. Additionally, endogenous growth models typically do not assume diminishing marginal returns to capital, and the capital-labor ratio may change over time as the economy grows.

In Endogenous Growth Models,it Is Assumed That