A central lesson of the Solow model is a bit of a surprise:
A) Capital accumulation cannot serve as the engine of long-run per capita economic growth.
B) Capital accumulation is the only engine of long-run per capita economic growth.
C) Consumption is the only engine of short-run per capita economic growth.
D) Saving rates serve as the engine of long-run per capita economic growth.
E) The initial capital stock plays a large part in long-run economic growth.

Question

Quizplus · Accepted Answer

The Solow model suggests that long-term economic growth is driven by technological progress rather than capital accumulation, which only affects growth temporarily.

A Central Lesson of the Solow Model Is a Bit