Suppose, Due to the Effects of a Military Conflict That

question 51

Multiple Choice

Suppose, due to the effects of a military conflict that has ended, that a country experiences a large decrease in its capital stock. Assume no other effects of this event on the economy. Which of the following will tend to occur as the economy adjusts to this situation?

• A) Positive growth, followed by negative growth, and then zero growth.
• B) A relative high growth rate for some time.
• C) No growth at all, until its capital stock has been replaced by other countries.
• D) Zero growth for some time, followed by a gradually increasing growth rate.
• E) A relatively low growth rate for some time.

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