In the Solow model, the equation of capital accumulation is:
A) .
B) .
C) .
D) .
E) .

Question

In the Solow model, the equation of capital accumulation is:
A) . 
B) . 
C) . 
D) . 
E) .

Quizplus · Accepted Answer

The Solow model's equation of capital accumulation is given by the following expression: 
Kt+1 - Kt = sF(Kt) - (n + δ)Kt
Where s is the savings rate, F(Kt) is the production function, n is the population growth rate, δ is the depreciation rate, and Kt and Kt+1 are the capital stocks in the current and next periods, respectively. 
Choice B is the only option that matches this equation.

In the Solow Model, the Equation of Capital Accumulation Is