Hello, please explain the diagram and the one i have highlighted, i am not quite clear with it, thanks!

the growth of production. We can illustrate the same adjustment in the investment-savings diagram that we introduced in Chapter 4. When capital is at the steady state level K*, production is at the steady state level Y* determined by Y* = F(K , EN") and the real interest rate is equal to p. The unbroken lines in Fig. 5.2 show invest- ments and savings as functions of the interest rate when K = K* and Y = Y. . But Fig. 5.2 The effect of capital accumulation on investment, saving, and the real rate of interest S(Y', Y's,K) S(Y , Y, r, k ) p I(,Y', K') 1( , Y, K) S,I OKsuppose instead that we start from lower levels of capital and production K' and Y'. Such a situation is illustrated by the dashed lines. Since we have less capital, the return on investment is higher, so the investment schedule is further to the right. Since income is lower, savings are lower for a given interest rate, so the sav- ings schedule is further to the left. Thus we see that the real interest rate will be higher than p in this situation. Then we know, from our theory of consumption in Chapter 4, that households will save some of their income, so the capital stock will grow towards the steady state level