If the Japanese Production Function Is Cobb-Douglas with Capital Share

question 34

Multiple Choice

If the Japanese production function is Cobb-Douglas with capital share 0.3, output growth is 3 percent per year, depreciation is 4 percent per year, and the capital-output ratio is 2.5, the saving rate that is consistent with steady-state growth is:

• A)12.5 percent.
• B)14 percent.
• C)17.5 percent.
• D)20 percent.

---

Definitions:

Pure Monopoly

A market structure characterized by a single seller selling a unique product in the market, resulting in significant control over pricing and market supply.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, allowing them some power to set prices.

Oligopoly

A distinct form of market where only a few companies have significant influence over industry prices and competition.

Herfindahl Index

A measure of market concentration used to determine the competitive landscape by summing the squares of the market shares of all firms in the industry.