A central assumption of the Neoclassical growth model is that A) long-run growth arises from correcting...
A central assumption of the Neoclassical growth model is that
A) long-run growth arises from correcting market failures b) long-run growth arises only from technological innovation
B) long-run growth arises only from technological innovation
C) there are diminishing marginal returns to a single factor
D) there are constant marginal returns to investment
E) there are increasing marginal returns to capital investment
Homework Answers
Correct option is (C).
The Neoclassical growth model is based on a key assumption that returns to capital (a single factor) exhibits diminishing returns.
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