Solow Growth Model: Basics

1.What is the purpose of the SGM? What does it explain?

2.List and explain the assumptions upon which the SGM is built--pay special attention to the “iron logic of diminishing returns.”

3.List the factor(s) that may cause the depreciation line to pivot upwards.

4.List the factor(s) that may cause the production function curve to pivot upwards.

5.List the factor(s) that may cause the--gross--investment curve to pivot upwards.

Answer rating: 100% (QA)

Required solution Ans 1 The purpose of the model is to explain the long run growth rate in the econo... View the full answer