Question

In the Basic Solow Model without exogenous growth, if the population, and therefore the labor supply, doubles:_______

a. Steady state output per worker will fall by half.
b. Steady state output per worker will fall by more than half.
c. Steady state output per worker will fall by less than half.
d. Steady state output per worker will be unchanged.

Answer 1

In the Basic Solow Model without exogenous growth, if the population, and therefore the labor supply, doubles steady state output per worker will be unchanged.

Step-by-step explanation:

According to the given scenario options A, B and C are ruled out. Hence, the answer to the above question is option D. Steady state output per worker will be unchanged.

Hope this helps.