Key Element of Economic Growth in Solow Model

Easy Economic Growth And Development Growth Theories

In the context of economic growth theories, the Solow Growth Model emphasizes the importance of several factors for long-term economic growth. This model incorporates technological progress, capital accumulation, and labor force growth. Based on the principles of the Solow Growth Model, which of the following statements correctly identifies a key element that enhances economic growth over the long term?

Increase in government spending leads to sustainable long-term growth.

Technological advancement is crucial for sustained increases in output per worker.

Higher population growth directly leads to an increase in the standard of living.

Hint

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