Question: Beginning from a steady state in the Solow growth model, which of the following does not occur when there is an increase in the saving
Beginning from a steady state in the Solow growth model, which of the following does not occur when there is an increase in the saving rate?
A An increase in the saving rate will cause a permanent increase in the growth rate of capital.
B In the new steady state, investment will equal depreciation and no additional rise in capital per worker will occur.
C If the saving rate increases, a larger portion of the present output per worker will be invested in new capital.
D The level of output per worker will increase from its current level.
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