The Solow growth model identifies which of the following as a source of long-run per capita income growth? MCQ with Answer and Explanation

The Solow growth model identifies which of the following as a source of long-run per capita income growth?
A. Increase in savings only
B. Technological progress
C. Population growth
D. Capital accumulation
Answer: Option B
Solution (By JKSSB Mock Tests)
In the Solow model, sustained long-run per capita income growth comes from technological progress.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is a characteristic of the 'Rational Expectations' hypothesis?
A. Expectations are always adaptive
B. Agents use only past information and make systematic errors
C. Agents ignore all available information
D. Agents form expectations using all available information and do not make systematic errors

Correct Answer: Option D


Explanation:
Rational expectations imply that agents optimally use all available information, so that forecast errors are uncorrelated with information known at the time the expectation is formed.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'GeM' portal is operated by which organization?
A. RBI
B. Ministry of Finance
C. NITI Aayog
D. Ministry of Commerce and Industry

Correct Answer: Option D


Explanation:
Government e-Marketplace is operated under the Ministry of Commerce and Industry.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is a characteristic of the 'Balanced Growth' path in the Solow model?
A. Only capital grows while output is constant
B. There is no steady state
C. Per capita variables grow at different rates
D. Capital, output and effective labour all grow at the same rate

Correct Answer: Option D


Explanation:
On the balanced-growth path of the Solow model, aggregate capital, output and effective labour grow at the exogenous rate of technological progress plus population growth, so that capital and output per effective worker are constant.

This question belongs to: Economy GK Economy Set 1