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The Solow Model concludes that the accumulation of physical capital cannot account for the vast growth over time in output per person. This is…

The Solow Model concludes that the accumulation of physical capital cannot account for the vast growth over time in output per person. This is because:

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a.    Differences in real incomes are far too large to be accounted for by differences in capital inputs.

b.    Other potential sources of income are endogenous (such as technological progress) and accordingly explain in the main the growth in output per person

c.    The case of positive externalities explains only a small amount of growth in output per person over time.

d.    Choices b), c) and d) are true; a) is untrue

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