High School

When the depreciation rate is constant, as in the Solow model, an economy with more capital per worker has to invest _____ compared to a country with a lower capital per worker (k) in order to keep its stock of capital per worker constant.

Answer :

Final answer:

In the Solow model, an economy with more capital per worker needs to invest more than a country with a lower capital stock to maintain a constant capital stock per worker.

Explanation:

In the Solow model, when the depreciation rate is constant, an economy with more capital per worker has to invest more than a country with a lower capital stock in order to keep its stock of capital per worker constant. This is because the depreciation of capital reduces the level of capital per worker over time, so a higher investment is required to offset the depreciation and maintain the capital stock per worker.

Learn more about Solow model here:

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