Which of the following can drive long-run economic growth in the Solow model?

Question

Quizplus · Accepted Answer

In the Solow model, the only factor that can drive long-run economic growth is technological knowledge. While physical capital (B) and real capital (C) can increase output in the short run, eventually the economy will reach a steady state where capital accumulation no longer leads to economic growth. Human capital (A) can also increase output in the short run, but it is included in the production function as a factor of labor, rather than a separate source of growth. Therefore, the best answer is D, technological knowledge, which can continuously improve productivity and drive long-run economic growth.

Which of the Following Can Drive Long-Run Economic Growth in the Solow