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Questions and Answers
In the given equation ∆k = sf(k) - (δ + n + g)k, what does the term 'sf(k)' represent?
In the given equation ∆k = sf(k) - (δ + n + g)k, what does the term 'sf(k)' represent?
- Depreciation rate multiplied by the capital stock
- Productivity growth factor multiplied by the capital stock
- Technology factor multiplied by the capital stock
- Savings rate multiplied by the capital stock (correct)
What does the term '(δ + n + g)k' represent in the equation ∆k = sf(k) - (δ + n + g)k?
What does the term '(δ + n + g)k' represent in the equation ∆k = sf(k) - (δ + n + g)k?
- New investment and capital accumulation
- Depreciation and population growth (correct)
- Capital depreciation, labor force growth, and technological progress
- Innovation and technology advancement
What impact does an increase in the savings rate 's' have on the steady-state capital stock in the Solow growth model?
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 (correct)
- It decreases the steady-state capital stock
- It has no effect on the steady-state capital stock
- It causes fluctuations in the steady-state capital stock
In the context of the Solow growth model, what does 'technological progress' refer to?
In the context of the Solow growth model, what does 'technological progress' refer to?
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