Suppose Two Countries Are Identical in Every Way with the Following

question 12

Multiple Choice

Suppose two countries are identical in every way with the following exception. Economy A has a higher rate of depreciation (6) than economy B. Given this information, we know with certainty that:

• A) steady state consumption in A and B are the same.
• B) steady state growth of output per worker is higher in B than in A.
• C) steady state growth of output per worker is higher in A than in B.
• D) steady state consumption in A is lower than in B.
• E) steady state consumption in A is higher than in B.

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Definitions:

Praise Lavishly

The act of giving excessive or extravagant compliments, often to motivate or reinforce positive behavior.

Rational Persuasion

Using logical arguments and factual evidence to convince someone of a particular point of view.

Exchanging Favors

The practice of mutual assistance where participants provide services or help to each other with an expectation of reciprocation.

Machiavellian Techniques

Strategies based on cunning, manipulation, and the use of power for personal gain, inspired by the philosophy of Niccolò Machiavelli.