Suppose that the government passes a law requiring households to increase savings 10% above previous levels. According to Solow's growth theory, in the long run
A) output per capita grows more rapidly.
B) output per capita grows at the constant steady state rate, n.
C) output per capita stays constant.
D) None of the above.
B
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How did the gold standard help countries rectify the balance of payment problem? What were the problems associated with the gold standard?
What will be an ideal response?
If Pepsi decided to raise its price, you would expect the price of Coca Cola
A) to fall. B) to raise. C) Their prices should have no relationship because Pepsi and Coca Cola are not related. D) None of the above answers are correct.
Prices of commercial airline tickets (assume that this is a normal good) have fallen in recent months. Over this same period, the price of jet fuel has risen and consumer incomes have fallen
Which of the following best explains the falling prices of airline tickets? A) The supply curve for airline tickets has shifted to the left while the demand curve for airline tickets has shifted to the right. B) The demand curve for airline tickets has shifted to the left more than the supply curve has shifted to the left. C) The supply curve for airline tickets has shifted to the left more than the demand curve has shifted to the left. D) The demand curve and the supply curve for airline tickets have both shifted to the right.
One of the more unique aspects of NAFTA compared with other preferential trade arrangements is the fact that the NAFTA countries have
A) similar cultures. B) fixed exchange rates. C) common borders. D) very different standards of living.