Question

In the adjusted Solow growth model which incorporates labor-augmenting technology, the steady-state growth rate of output per effective worker is ______, and the steady-state growth rate of output per actual worker is ______.

Answer 1

Answer: The correct answer is : zero ; the rate of technological progress

Explanation: In the Solow growth model with population growth and technological change, the steady-state growth rate of income per person depends on the rate of technological progress. According to the Solow model, persistently rising living standards can only be explained by technological progress.