Economics MCQs
Topic Notes: Economics
MCQs and preparation resources for competitive exams, covering important concepts, past papers, and detailed explanations.
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
11
According to the basic Solow growth model, what is the primary mechanism to increase the steady-state level of output per worker?
Answer:
save more
In the Solow growth model, an increase in the savings rate leads to a higher steady-state level of capital per worker and, consequently, a higher steady-state level of output per worker. While this does not change the long-run steady-state growth rate of output per worker (which is determined by technology), it increases the level of income, making saving a fundamental driver of capital accumulation.