In the Solow Model, a higher depreciation rate is illustrated as:

Name: In the Solow Model, a higher depreciation rate is illustrated as:
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Question

Quizplus · Accepted Answer

In the Solow Model, a higher depreciation rate means that the sustaining investment (dK line) needs to be steeper in order to maintain the same steady state capital stock. Therefore, the correct answer is B, a steeper dK line. The other choices are not affected by changes in the depreciation rate.

In the Solow Model, a Higher Depreciation Rate Is Illustrated