The Idea That Saving Equals Investment in the Solow Model

question 58

Multiple Choice

The idea that saving equals investment in the Solow model means that a steady state can be reached only when

• A)s = k.
• B)s = n + d.
• C)sf(k)= (s + d)k.
• D)sf(k)= (n + d)k.

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Definitions:

Marginal Revenue

The additional income that is generated from selling one more unit of a good or service.

Marginal Cost

The financial outlay for producing a subsequent unit of a product or service.

Market Price

The prevailing market rate at which a service or asset can be purchased or sold, influenced by the balance of supply and demand.

Marginal Cost

The additional cost incurred from producing one more unit.