Question
Assume that two countries (Jordan and Lebanon) both have the per-worker production function y = k^1/2, neither has population growth or technological progress, depreciation is
Assume that two countries (Jordan and Lebanon) both have the per-worker production function y = k^1/2, neither has population growth or technological progress, depreciation is 5 percent of capital in both countries, and Jordan saves 10 percent of output whereas Lebanon saves 20 percent. If Jordan starts out with a capital-labor ratio of 4 and Lebanon starts out with a capital-labor ratio of 2, in the long run:(1 Point)
Lebanon's capital-labor ratio will be 16 whereas Jordan's will be 4
both countries will have capital-labor ratios of 4.
both countries will have capital-labor ratios of 16.
Jordan's capital-labor ratio will be 16 whereas Lebanon's will be 4.
None of the above is correct
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started