The key difference between the Solow model and the production model is:
A) the Solow model endogenizes the process of capital accumulation
B) the standard model endogenizes the process of capital accumulation
C) the Solow model uses different values for the capital share
D) the Solow model does not contain a productivity measure
E) the Solow model exogenizes the process of capital accumulation

Question

Quizplus · Accepted Answer

The key difference between the Solow model and the production model is that the Solow model endogenizes the process of capital accumulation, while the production model does not. In other words, the Solow model introduces a mechanism by which capital is accumulated over time, while the production model assumes that capital is given exogenously.

The Key Difference Between the Solow Model and the Production