The economic Growth rate reverts to the slow growth rate in the long run.
What happens to the Solow model if the population increases?
- In the Solow model, an increase in the population growth rate raises the growth rate of aggregate output but has no permanent effect on the growth rate of per capita output.
- An increase in the population growth rate lowers the steady-state level of per capita output.
- According to the Solow Growth Model, the production function displays constant returns to scale (CRS).
- According to this supposition, doubling the capital stock and the labor force causes the output to exactly double.
- Because of this, the Solow model's mathematical analysis concentrates on output and capital per worker rather than total output and total capital stock.
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