In the Solow Growth Model, If Investment Is Less Than

question 53

Multiple Choice

In the Solow growth model, if investment is less than depreciation, the capital stock will ______ and output will ______ until the steady state is attained.

• A) increase; increase
• B) increase; decrease
• C) decrease; decrease
• D) decrease; increase

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Definitions:

Prevention

Actions or strategies aimed at stopping problems or issues from occurring or worsening.

Stress

The physical or emotional strain resulting from demanding circumstances or challenging situations.

Excitement

A feeling of enthusiasm or heightened emotion, often brought about by something new or stimulating.

Fight-or-Flight

A biological response triggered by a recognized danger, assault, or survival threat.