Question

According to the Solow model an increase in the growth rate of the labor force will:

A. increase income per worker
B. decrease income per worker
C. have no change on income per worker
D. not enough

Answer 1

In the Solow model, an increase in the growth rate of the labor force will increase income per worker.

Step-by-step explanation:

In the Solow model, an increase in the growth rate of the labor force will increase income per worker. This is because when the labor force grows more rapidly, there are more workers available to produce goods and services. As a result, the total output of the economy increases, leading to higher income per worker.