The Solow growth model shows that the growth rate of real GDP per worker depends on:
A)the rate of growth of the money supply.
B)level of output in the economy.
C)the depreciation rate, .
D)all of the above.

Question

The Solow growth model shows that the growth rate of real GDP per worker depends on:
A)the rate of growth of the money supply. 
B)level of output in the economy. 
C)the depreciation rate, . 
D)all of the above.

Quizplus · Accepted Answer

The Solow growth model shows that the growth rate of real GDP per worker depends on the depreciation rate (C). The rate of growth of the money supply (A) and the level of output in the economy (B) are not included in the model as primary determinants of long-run economic growth. Therefore, the correct answer is C, only the depreciation rate is a determinant of long-run economic growth according to the Solow growth model.

The Solow Growth Model Shows That the Growth Rate of Real