Figure 5.6 a.
an increase in the depreciation rate.
d.
a decrease in the capital stock.
b.
a positive TFP shock.
e.
both a and c.
c.
a decline in the saving rate.
-The analysis of how an economy approaches the steady state is called:
A) investment.
B) economic growth.
C) transition dynamics.
D) saving.
E) depreciation.

Question

Figure 5.6  a.
an increase in the depreciation rate.
d.
a decrease in the capital stock.
b.
a positive TFP shock.
e.
both a and c.
c.
a decline in the saving rate.
-The analysis of how an economy approaches the steady state is called:
A) investment. 
B) economic growth. 
C) transition dynamics. 
D) saving. 
E) depreciation.

Quizplus · Accepted Answer

Transition dynamics refers to the analysis of how an economy evolves over time towards its steady state, including the paths of economic variables such as capital accumulation, consumption, and output.

Figure 5.6 A