Reference no: EM132405662

Consider the country of 'Swan', which is described by the Solow-Swan model. Let the saving rate equal 0.8; let the population growth rate equal 0.05; let the rate of depreciation d = 0.05. If per capita income y=100 and the per capita stock of capital k = 600, then

a. change in k = 0 and k is at the steady state per capita capital stock.

b. change in k = 20 and k is below the steady state per capita capital stock.

c. change in k = -20 and k is above the steady state per capita capital stock.

d. change in k = -20 and k is below the steady state per capita capital stock.

e. There is not enough information to tell.