Intermediate Macroeconomics quizzes
How saving, investment, and technological progress shape economic growth—and why saving more has limits.
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From Intermediate Macroeconomics: Why Saving More Can't Grow Forever
In the Solow model, what does faster population growth do to a country's steady state?
- Raises income per worker forever
- Leaves income per worker unchanged
- Lowers capital and income per worker
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Answer: Lowers capital and income per worker
More new workers must each be equipped with capital, so the same saving spreads thinner, leaving less capital per worker.
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