According to the Solow growth model, you would expect the

to be closer to its steady state.

Part $2(0\mathrm{.}3$ point$)$

According to the Solow model, investment in the

would yield relatively greater returns.

Part $3(0\mathrm{.}3$ point$)$

The Solow model predicts that, over time, real GDP in developing economies could potentially converge to the same level of real GDP as developed economies. Which of the following is not consistent with convergence?

Choose one:

A$.$ Because investment in developing nations yields relatively greater returns, capital will flow into developing economies, leading to relatively greater economic growth.

B$.$ Developing nations should converge because they can take advantage of technological discoveries made by developed economies.

C$.$ Over time, developing economies become richer, and developed economies become poorer, until they reach the same level of wealth.

D$.$ Investors seeking to build new factories would likely build those factories in developing economies that have some political stability.