In the Two-Sector Endogenous Growth Model, the Steady-State Stock of Physical

question 16

Multiple Choice

In the two-sector endogenous growth model, the steady-state stock of physical capital is determined by _____, and the growth in the stock of knowledge is determined by _____.

• A)the fraction of labour in universities; the saving rate
• B)the efficiency of labour; the saving rate
• C)the production function; the efficiency of labour
• D)the saving rate; the fraction of labour in universities

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Definitions:

Subsidiary Company

A company that is completely or partially owned and wholly controlled by another company, which is referred to as the parent company.

Cost Method

An accounting method for investments where the investment is recorded at the purchase cost, without recognizing subsequent changes in market value.

Semiannual Receipt

Payments or incomes that are received twice a year.

Accrued Interest

The amount of interest that has been incurred but not yet paid over a particular period.