In the Solow model, the faster growth of output that results from ...

[urbanoutfitters]

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

Question 2

Compared to adaptive expectations, rational expectations would imply that the transition between the short-run and the long-run will take:
 
  a. the same amount of time.
  b. a longer period of time.
  c. a variable period of time.
  d. less time.

[parshano]

Answer to Question 1

A

Answer to Question 2

D

[urbanoutfitters]

Excellent

[scottmt]

Gracias!