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Answer :
The statement, "Solow model: A decrease in the population growth rate will shift the saving-per-worker curve upward and increase the steady-state capital stock per worker" is correct. The correct option is A.
This is because the Solow model states that an increase in the rate of population growth leads to a decrease in capital stock per worker and a decrease in the population growth rate will result in an increase in capital stock per worker. Hence, alternative (A) is the correct answer.
What is the Solow Model?
The Solow Model is an economic growth model. It's also known as the Solow-Swan model, named after economists Robert Solow and Trevor Swan, who independently developed the concept. It explains long-run economic growth in terms of productivity, capital accumulation, population growth, and technological advancement. It also investigates how a country's capital stock, population, and technology interact to produce economic growth.
In the Solow model, the steady-state capital stock per worker (K*) is calculated by setting the investment and depreciation rates equal to each other. As a result, any change that alters the investment rate, the depreciation rate, or the rate of population growth will cause a shift in the saving-per-worker curve.
Thus, A is the correct option.
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