According to the Solow growth model,investment in developing nations should be ________ investment in more developed nations.
A) higher than
B) the same as
C) permanently lower than
D) permanently higher than
E) more negative than

Question

Quizplus · Accepted Answer

According to the Solow growth model, developing nations have lower levels of capital per worker than more developed nations. Therefore, investing in developing nations would lead to higher returns due to the diminishing returns of capital. This indicates that investment in developing nations should be higher than that in more developed nations.

According to the Solow Growth Model,investment in Developing Nations Should