In the Solow growth model, if investment is less than depreciation, the capital stock will decrease and output will decrease until the steady state is attained.
If investment is less than depreciation, the capital stock will contract and output will fall. A greater rate of consumption per worker is referred to as the "golden rule" of capital stock.
The Solow Growth Model's repercussions Long-term growth is nonexistent. The Solow Growth Model predicts conditional convergence if countries have the same g (population growth rate), s (savings rate), and d (capital depreciation rate), then they have the same steady state and will converge.
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Complete Question:
In the Solow growth model, if investment is less than depreciation, the capital stock will ______ and output will ______ until the steady state is attained. decrease; increase decrease; decrease increase; increase increase; decrease
