What will happen to the steady-state equilibrium level of output and capital stock in an economy if:
a) there is an increase in the savings rate.
b) there is a deterioration of human capital.
What will be an ideal response?
a) If there is an increase in the savings rate of an economy, it will have a steady-state equilibrium with a higher level of capital stock and income than the initial steady-state equilibrium levels.
b) If there is deterioration of human capital in an economy, it will have a steady-state equilibrium with a lower level of capital stock and income than the initial steady-state equilibrium levels.
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Countries with stable inflation rates tend to have ________ SAS curves
A) flat B) steep C) flat or steep D) None of the above. All countries have SAS curves with almost the same slope.
Which of the following is least likely to be considered an input to production?
A) a supervisor's time B) an integrated circuit fabrication plant C) wind D) None of the above.
Maximizing the present value of all future profits is the same as maximizing current profits if the growth rate in profits is:
A. less than the interest rate. B. greater than the interest rate. C. not constant over time. D. equal to the interest rate.
A firm with market power will be able to sell all of their output at any price they desire.
Answer the following statement true (T) or false (F)