A central lesson of the Solow model is that:
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 emphasizes that while capital accumulation can drive growth in the short run, it faces diminishing returns in the long run, making it unsustainable as the sole engine of long-run per capita economic growth. Instead, technological progress is seen as key to sustained long-term growth.

A Central Lesson of the Solow Model Is That