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The diagram below is based on a modified Solow model, where the shift represents a higher level of technology. Suppose we hav
From left to right, A is followed by B on the lower curve; C is followed by D on the upper curve, with C to the right of A an
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Answer #1

Option A is correct.

The reason is that sollow model predicts that rich countries have a higher level of capital per worker (K/L, or k- the horizontal axis), making their workers more productive, hence richer country would always be on the right of a poorer countries. This means D will always be right of C and B will always be right of A.

It is also given that C is slightly better off than B, placing C to the right of B.

All of the above combined give us the option A as right answer.

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