Fretonia and Libstien are the same except Fretonia has a larger capital stock. Both countries undertake policies that raise their saving rates to the same higher level. We would expect that
a. both countries would have permanent increases in their growth rates, but the increase would initially be larger in Fretonia.
b. both countries would have permanent increases in their growth rates, but the increase would initially be smaller in Fretonia.
c. both countries would have temporary increases in their growth rates, but the increase would be larger in Fretonia.
d. both countries would have temporary increases in their growth rates, but the increase would be smaller in Fretonia.
d
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A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
The relative poverty line defines poverty:
A. in relation to the income of the rest of the population. B. based on the expenditure on food relative to total income. C. as the price of basic food, clothing, shelter and utilities, and adjusts for geographic differences in the cost of living. D. None of these is true.
Assume that Country X and Country Y are trading partners and the exchange rates are fixed. If prices in Country Y fall, which of the following is expected to happen?
a. Country X will export more. b. Economy of Country X will be depressed. c. Net exports will rise for Country X. d. Country Y will import more.
Which of the following is the name of the entity, group, or organization that has the power to conduct key monetary policy by purchasing or selling U.S. government securities?
a. The President of the United States b. The Open Market Subcommittee of the Congress of the United States c. CEO's of large commercial banks, with non-binding recommendations by the Fed d. The Federal Reserve Open Market Committee