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In Solow's Model of Economic Growth, Suppose That S Represents sk(s+d) \frac{s k^{*}}{\left(s+d\right)}

Question 25

Multiple Choice

In Solow's model of economic growth, suppose that s represents the savings rate, z represents total factor productivity, k represents the level of capital per worker, and f(k) represents the per worker production function. Also suppose that n represents the population growth rate and d represents the depreciation rate of capital. The equilibrium level of capital per worker, k*, will satisfy the equation


A) szf(k*) = (n + d) k*.
B) szk* = (n + d) f(k*) .
C) nf(k*) = sk(s+d) \frac{s k^{*}}{\left(s+d\right) }
D) f(k*) = k* s(n+d) \frac{s}{(n+d) }
E) f(k*) = (n + d) k*.

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