Question

In the Solow growth model, where s is the saving rate, y is output per worker, and i is investment per worker, consumption per worker (c) equals:______.
A. (1 – s)y.
B. (1 + s)y.
C. sy .
D. (1 – s)y – i.

Answer 1

Answer:

A. (1 – s)y.

Explanation:

Solow growth model describes  how saving, population growth, and technological change affect output over time and describes changes in the economy over time.

In the Solow growth model, where s is the saving rate, y is output per worker, and i is investment per worker, consumption per worker (c) equals:(1 – s)y