In the Solow Model,the Faster Growth of Output That Results

question 65

Multiple Choice

In the Solow model,the faster growth of output that results from an increase in the saving rate is temporary,because ________.

• A)of diminishing marginal product of capital
• B)with a larger stock of capital,consumption is encouraged more than investment
• C)the rising capital stock depreciates at a faster rate
• D)the economy settles into a steady state in which saving no longer rises

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Definitions:

Noncash Assets

Assets that are not in the form of cash or cash equivalents, including property, equipment, and intellectual property.

Net Income and Losses

The difference between total revenues and total expenses, indicating the financial performance of a company over a specific period.

Sale

A transaction between two parties where the ownership of goods, services, or assets is transferred from the seller to the buyer for an agreed amount of money or value.

Journal Entry

A record in the books of accounts that represents a business transaction and its effects on the company's finances.