If a Natural Disaster Destroys a Large Portion of a Country's

Multiple Choice

If a natural disaster destroys a large portion of a country's capital stock but the saving and depreciation rates are unchanged, the Solow model predicts that the economy will grow and eventually reach:

A) the same steady-state level of output as it would have before the disaster.
B) a higher steady-state level of output than it would have before the disaster.
C) a lower steady-state level of output than it would have before the disaster.
D) Not enough information is given.
E) None of these answers is correct.