Developed Countries That Direct Their Investment Towards Physical Capital Rather

question 41

Multiple Choice

Developed countries that direct their investment towards physical capital rather than research and development can expect to

• A)have a higher level of output in the short run and a higher long-run growth rate
• B)have a lower level of output in the short run and lower long-run growth rate
• C)have a lower level of output in the short run but a higher long-run growth rate
• D)have a higher level of output in the short run but a lower long-run growth rate
• E)achieve A but only if the level of investment exceeds 1/3 of GDP

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