Suppose There Are Two Countries That Are Identical in Every

question 13

Multiple Choice

Suppose there are two countries that are identical in every way with the following exception: Country A has a higher stock of human capital than country B. Given this information, we know with certainty that:

• A) output per worker will be the same in the two countries.
• B) the growth rate will be the same in the two countries.
• C) the growth rate will be higher in A than in B.
• D) the growth rate will be higher in B than in A.
• E) capital per worker will be the same in the two countries.

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Definitions:

Bonus Depreciation

An incentive for businesses, allowing them to immediately deduct a significant portion of the purchase price of eligible business assets in the year they are placed in service.

Recapture

A process whereby the IRS requires taxpayers to add back certain deductions or credits they have claimed in the past, often related to depreciation or tax credits.

Cost Recovery Deductions

Deductions that allow for the recovery of the cost of certain property over time, often through depreciation or amortization.

Schedule C

A financial document utilized by individual business owners to declare their business's earnings or deficits.