According to the Solow model, given the levels of total efficiency units of labor and technology:
A) efficiency units of labor do not play any role in the determination of steady-state equilibrium level of GDP.
B) there is a maximum fixed level of GDP that an economy can achieve by increasing savings.
C) increases in the savings rate is the sole reason for sustained economic growth.
D) increases in the rate of physical capital accumulation can be the sole reason for sustained economic growth.
B
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According to classical growth theory, when real GDP per person ________, the population grows
A) is less than the subsistence real income B) is less than capital per hour of labor C) is constant D) exceeds the subsistence real income E) exceeds capital per hour of labor
Which of the following represents the Lucas supply function?
A. Y = f(Pe + P) B. Y = f(P - Pe) C. Y = f(P + Pe) D. Y = f(Pe - P)