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Roar Roar
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7 years ago
At the current steady state capital-labor ratio, assume that the steady state level of per capita consumption, (C/N)*, is greater than the golden rule level of steady state per capita consumption. Given this information, we can be certain that
A) a reduction in the saving rate will cause a decrease in the steady state level of per capita consumption ((C/N)*).
B) an increase in the capital-labor ratio will cause an increase in (C/N)*.
C) the capital labor ratio will tend to decrease over time.
D) the capital labor ratio will tend to increase over time.
E) a reduction in the saving rate will have an ambiguous effect on (C/N)*.
Textbook 
Macroeconomics

Macroeconomics


Edition: 6th
Authors:
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legendvpnlegendvpn
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Roar Author
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#2
6 years ago
Thank you kind sir
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