In the Solow model, in every period, a fraction of total output ________, which ________ next period's capital stock.
A) is saved; reduces
B) depreciates; adds to
C) is saved; adds to
D) is consumed; adds to
E) is consumed; reduces

Question

Quizplus · Accepted Answer

In the Solow model, a fraction of total output is saved, and this saved portion is used to add to the next period's capital stock, facilitating economic growth.

In the Solow Model, in Every Period, a Fraction of Total