Suppose the Economy Is Initially in the Steady State

question 53

Multiple Choice

Suppose the economy is initially in the steady state. A decrease in the depreciation rate (6) will cause:

• A) a decrease in Y/N.
• B) a decrease in C/N.
• C) an increase in K/N.
• D) an increase in the growth rate in the long run.
• E) a decrease in the saving rate.

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Definitions:

Recognizance

An obligation in which a party acknowledges in court that he or she will perform some specified act and/or pay a price on failure to do so.

Bail

A thing of value, such as a money bail bond or any other form of property, that is given to the court to allow a person’s temporary release from jail and to ensure his or her appearance in court.

Offeree

A person or entity to whom an offer is made, which they can either accept or reject.

Offeror

The individual or party that presents a proposal or contract to another party for acceptance.