If Two Economies Are Identical (With the Same Population Growth

question 59

Multiple Choice

If two economies are identical (with the same population growth rates and rates of technological progress) , but one economy has a lower saving rate, then the steady-state level of income per worker in the economy with the lower saving rate:

• A)will be at a lower level than the steady state of the high-saving economy.
• B)will be at a higher level than the steady state of the high-saving economy.
• C)will be at the same level as the steady state of the high-saving economy.
• D)will grow at a slower rate than the high-saving economy.

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Definitions:

Economic Profit

The difference between revenue received from the sale of an output and the opportunity cost of the inputs used.

Nash Equilibrium

A concept in game theory where no player can benefit by changing their strategy while the other players keep theirs unchanged, representing a state of strategic balance.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.

Dominant Strategy

In game theory, a strategy that is best for a player regardless of the strategies chosen by other players.