In the steady state of Solow's exogenous growth model,an increase in the savings rate

Question

Quizplus · Accepted Answer

In the steady state of Solow's exogenous growth model, an increase in the savings rate leads to higher investment and hence an increase in capital per worker, which in turn leads to an increase in output per worker. Therefore, option A is the correct choice. The other options are not consistent with the basic logic of the model.

In the Steady State of Solow's Exogenous Growth Model,an Increase