Consider the country of Solow, which is described by the Solow–Swan model. Let the saving rate θ =0.8; let the population growth rate n = 0.05; let the rate of depreciation d = 0.05. If per capita incomey = 100 and the per capita capital stock k = 1000, which of the following is true? a.Replacement investment is 100, saving is 80 and k will increase towards the steady state per capita capitalstock b.Replacement investment is 100, saving is 60 and k will decrease towards the steady state per capita capitalstock c.Replacement investment is 100, saving is 80 and k will decrease towards the steady state per capita capitalstock d.Replacement investment is 100, saving is 80 and k is at the steady state per capita capital stock
Consider the country of Solow, which is described by the Solow–Swan model. Let the saving rate θ =0.8; let the population growth rate n = 0.05; let the rate of
a.Replacement investment is 100, saving is 80 and k will increase towards the steady state per capita capitalstock
b.Replacement investment is 100, saving is 60 and k will decrease towards the steady state per capita capitalstock
c.Replacement investment is 100, saving is 80 and k will decrease towards the steady state per capita capitalstock
d.Replacement investment is 100, saving is 80 and k is at the steady state per capita capital stock
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