Multiple Choice
Refer to the following figure when answering the following questions.
Figure 5.7: Solow Diagram
-Consider Figure 5.7. If KSK is the current capital stock in South Korea and KCH is the current capital stock in China, according to the principle of transition dynamics:
A) China initially will grow faster than South Korea, but each will have the same steady state.
B) China initially will grow slower than South Korea, but each will have the same steady state.
C) China initially will grow faster than South Korea and will have a higher steady state.
D) China initially will grow faster than South Korea and will have a lower steady state.
E) both South Korea and China initially will grow at the same rate and have the same steady state.
Correct Answer:

Verified
Correct Answer:
Verified
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