In the Solow model, it is assumed a(n) ________ fraction of capital depreciates each period.
A) zero
B) increasing
C) decreasing
D) constant
E) None of these answers are correct.

Question

Quizplus · Accepted Answer

The Solow model assumes a constant fraction of capital depreciates each period, which is denoted by the variable delta. This assumption allows for a steady state equilibrium to exist in the model, where investment equals depreciation and the capital stock remains constant over time.

In the Solow Model, It Is Assumed A(n) ________ Fraction