The Solow model describes:
A) how saving rates are determined.
B) the static relationship between capital and output.
C) how savings, population growth, and technological change affect output over time.
D) how savings, population growth, and technological change affect output in a single period.
E) what constitutes technological change.

Question

Quizplus · Accepted Answer

The Solow model describes how savings, population growth, and technological change affect output over time. It is a dynamic model that shows how an economy's long-run growth rate depends on technological progress, population growth, and capital accumulation.

The Solow Model Describes