Which statement is consistent with the predictions of the simple Solow model with no technological advancement?
A) In the long run,economic growth is zero.
B) In the long run,a higher capital stock raises economic growth.
C) In the long run,rich countries grow faster than poor countries.
D) In the long run,a higher saving rate reduces economic growth.

Question

Quizplus · Accepted Answer

In the simple Solow model without technological advancement, economies approach a steady state where economic growth stabilizes at zero because investments in capital reach a point where they only cover depreciation. This model suggests that without technological progress, economies cannot sustain long-term per capita growth.

Which Statement Is Consistent with the Predictions of the Simple