Which of the following is not an assumption of the Solow model of economic growth?
Rigid prices and wages are not an assumption of the Solow model. The model uses flexible adjustment, a constant saving ratio and a constant-returns production function;…
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Which of the following is not an assumption of the Solow model of economic growth?
Answer and explanation
Correct answer A
Rigid prices and wages are not an assumption of the Solow model. The model uses flexible adjustment, a constant saving ratio and a constant-returns production function; technical progress is treated as exogenous.
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Kerala SET (LBS Centre)