If an Economy with No Population Growth or Technological Change

question 69

Multiple Choice

If an economy with no population growth or technological change has a steady-state MPK of 0.125, a depreciation rate of 0.1, and a saving rate of 0.225, then the steady-state capital stock:

• A) is greater than the Golden Rule level.
• B) is less than the Golden Rule level.
• C) equals the Golden Rule level.
• D) could be either above or below the Golden Rule level.

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Definitions:

International Customer

A customer who resides in a different country from where the goods or services are produced or sold.

Available-for-sale Securities

Financial assets that are neither classified as held-for-trading nor held-to-maturity, which can be sold in the short-term for cash or held till maturity.

Trading Securities

Investments in debt or equity securities bought and held primarily for selling them in the short term to generate income on short-term price differences.

Unrealized Gain or Loss

Refers to the increase or decrease in the value of investments that a company holds but has not yet sold, which affects the financial statements only when realized.