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
A
Economics
You might also like to view...
When an average total cost pricing rule is enforced, average total cost equals ________
A) marginal revenue B) total revenue C) price D) average total cost
Economics
The capacity utilization rate is the ratio of ________ to ________
A) production; capacity B) capacity; production C) capacity; potential GDP D) none of the above
Economics