In the Solow growth model, assume all the standard assumptions hold, except that now population is constant (? = 0) and the depreciation rate ? is equal to zero. Which is true? a) There are two steady states b) Capital and capital per worker grow at the same rate c) In the steady state, investment is equal to the depreciation rate d) Aggregate savings are larger than aggregate investment e) If we start with an initial capital larger than zero, the living standards will keep growing forever
In the Solow growth model, assume all the standard assumptions hold, except that now population is constant (? = 0) and the depreciation rate ? is equal to zero. Which is true? a) There are two steady states b) Capital and capital per worker grow at the same rate c) In the steady state, investment is equal to the depreciation rate d) Aggregate savings are larger than aggregate investment e) If we start with an initial capital larger than zero, the living standards will keep growing forever
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Q) In the Solow growth model, assume all the standard assumptions hold, except that now population is constant (? = 0) and the
a) There are two steady states
b) Capital and capital per worker grow at the same rate
c) In the steady state, investment is equal to the depreciation rate
d) Aggregate savings are larger than aggregate investment
e) If we start with an initial capital larger than zero, the living standards will keep growing forever
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