In the Solow growth model of an economy with population growth but no technological progress,increases in capital have a positive impact on steady-state consumption per worker by ______,but have a negative impact on steady-state consumption per worker by ______.
A) increasing the capital to worker ratio; reducing saving in the steady state
B) reducing investment required in the steady state; increasing saving in the steady state
C) increasing output; increasing output required to replace depreciating capital
D) decreasing the saving rate; increasing the depreciation rate
Correct Answer:
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