When Capital Is Accumulated at the Rate That Maximizes Consumption

question 15

Multiple Choice

When capital is accumulated at the rate that maximizes consumption per worker in the steady state, the marginal product of capital is equal to the

• A) savings rate plus the population growth rate.
• B) population growth rate plus the depreciation rate.
• C) depreciation rate plus the savings rate.
• D) savings rate divided by the marginal product of labour.
• E) consumption per worker plus the population growth rate.

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Definitions:

Days' Sales in Inventory

A measure of how quickly inventory is sold and replaced over a period, calculated by dividing the ending inventory by the cost of goods sold and multiplying by 365.

Year 2

Typically refers to the second year in a given time frame or study period, often used in financial analysis, forecasts, or planning scenarios.

Ending Inventory Balance

The value or quantity of goods available for sale or use at the end of an accounting period, after accounting for purchases and sales during the period.

Income Statement

An income statement is a financial statement that shows a company's revenues and expenses over a specific period, resulting in a net income or loss.