Figure 10-4
-Which of the following is not a reason for differences in per capita income in neoclassical growth theory?

Question

Figure 10-4 
-Which of the following is not a reason for differences in per capita income in neoclassical growth theory?

Quizplus · Accepted Answer

One of the main assumptions of neoclassical growth theory is that all countries have the same production function, which means that the differences in per capita income cannot be attributed to differences in technology or efficiency of production. The other two options, different savings rates and slope of the steady-state investment line, are factors that can affect differences in per capita income in neoclassical growth theory.

Figure 10-4 -Which of the Following Is Not a Reason for Differences