In the Solow Model with Constant Technological Knowledge (A), If

question 117

Multiple Choice

In the Solow model with constant technological knowledge (A) , if investment exceeds depreciation:

• A) economic growth will occur.
• B) economic decline will occur.
• C) the economy will remain at its current output level.
• D) depreciation will cause the capital stock to decline.

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Definitions:

Marginal Benefit

The additional satisfaction or utility a consumer receives from consuming an additional unit of a good or service.

Marginal Cost

The financial outlay for making one more unit of a product or service.

Pollution Abatement

Measures and activities undertaken to reduce, control, or eliminate pollution from various sources in order to protect the environment.

Marginal Utility

The further gratification or value experienced by an individual upon consuming an extra unit of a particular good or service.