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The Solow Model Tells Us That If Economies Have Identical

Question 31

Multiple Choice

The Solow model tells us that if economies have identical levels and rates of growth of technology, but different values for the steady state variables δ, σ, and n, then:


A) complete convergence is impossible to achieve even if the steady state variables are equalized.
B) complete convergence still occurs since the rate of technological progress determines convergence.
C) complete convergence can be achieved by equalizing the steady state variables.
D) There will be divergence until all the steady state variables are equalized.

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