4 Questions
In the given equation ∆k = sf(k) - (δ + n + g)k, what does the term 'sf(k)' represent?
Savings rate multiplied by the capital stock
What does the term '(δ + n + g)k' represent in the equation ∆k = sf(k) - (δ + n + g)k?
Depreciation and population growth
What impact does an increase in the savings rate 's' have on the steady-state capital stock in the Solow growth model?
It increases the steady-state capital stock
In the context of the Solow growth model, what does 'technological progress' refer to?
Improvements in production methods and technology
This quiz explores the interpretation of the economic growth model equation, ∆k = sf(k) - (δ + n + g)k, and how investments are required to replace depreciating capital, provide new workers with capital, and provide capital for the 'effective workers' created by technological progress.
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