In the Solow Model, an increase in the depreciation rate will result in:

Name: In the Solow Model, an increase in the depreciation rate will result in:
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An increase in the depreciation rate means that more capital is being used up and not being replaced, resulting in a lower level of capital in the economy. Since capital is a key factor in production, a lower level of capital would lead to a lower level of output as well. Therefore, both capital and output will decrease in the economy.

In the Solow Model, an Increase in the Depreciation Rate