In the Solow model, if we assume that capital depreciation rates are the same across all countries, differences in per capita output can be explained by:
A) the steady-state capital stock
B) the initial capital stock and saving rates
C) differences in productivity and saving rates
D) the labor stock and saving rates
E) None of these answers are correct.

Question

Quizplus · Accepted Answer

In the Solow model, differences in per capita output can be explained by differences in productivity (represented by total factor productivity) and saving rates. The steady-state capital stock, initial capital stock, labor stock, and depreciation rates are all equal across countries in the model.

In the Solow Model, If We Assume That Capital Depreciation