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:

Human Capital

The capabilities, insights, and background held by either an individual or a collective, regarded in relation to their economic or strategic value to a company or a state.

Business Strategy

A plan of action designed to achieve a long-term or overall aim and to secure a competitive position in the market.

Team Learning

The interaction of individual ideas and efforts toward a team objective that results in outcomes that exceed the capabilities of any individual on the team.

Learning Organization

An organization that facilitates the learning of its members and continuously transforms itself to better respond to market and environmental changes.