Solow builds a model of long run growth on the basis of which of the following assumptions : A. Labour…

Robert Solow's neoclassical model of long-run economic growth assumes continuous substitutability between labour and capital (A), neutral technical progress (B), and a production function that is homogeneous of the first degree, i.e., exhibiting constant returns to scale (D). Rather than assuming rigid wages and prices (C), Solow's model assumes flexible wages and factor prices under competitive markets so that full employment is maintained. Thus, A, B and D are the correct assumptions.