Question
Consider a closed economy, where there is neither population growth nor technological progress. Which is true? a) If capital per worker is currently below its
Consider a closed economy, where there is neither population growth nor technological progress. Which is true?
a) If capital per worker is currently below its steady state level, then output per worker will decrease in the transition to the steady state.
b) None of the other statements is true.
c) If the production function satisfies decreasing returns to scale, then we can write it in per-worker terms.
d) If the economy is in a steady state, where the marginal product of capital equals the depreciation rate, then a government willing to maximize consumption per worker in the long run should not attempt to change the saving rate.
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