Refer to the Following Figure When Answering

question 13

Multiple Choice

Refer to the following figure when answering
Figure 5.4: Solow Diagram
-Consider the Solow model exhibited in Figure 5.4.
Which of the following is/are true?
i. For any single country, the movement from point a to b is due to an increase in the saving rate, s₁ > s₂.
ii. For any single country, the movement from point c to b is due to an increase in capital stock for the saving rate, s₂.
iii. If s₁ and s₂ stands for the saving rates in Countries 1 and 2, respectively, Country 2 has a lower saving rate.

• A) i
• B) ii
• C) iii
• D) i and ii
• E) i, ii, and iii

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