The Formula for the Steady-State Ratio of Capital to Labour

question 14

Multiple Choice

The formula for the steady-state ratio of capital to labour (k*) with population growth at rate n but no technological change, where s is the saving rate, is s:

• A)divided by the sum of the depreciation rate plus n.
• B)multiplied by the sum of the depreciation rate plus n.
• C)divided by the product of f (k*) and the sum of the depreciation rate plus n.
• D)multiplied by f (k*) divided by the sum of the depreciation rate plus n.

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Definitions:

Compounded Semi-Annually

Calculation of interest on the initial principal and the accumulated interest over the first 6 months repeated every half year.

RRSP

Registered Retirement Savings Plan, a Canadian investment vehicle that allows for tax-deferred savings towards retirement.

Contributions

Money that individuals or entities provide towards a common pool or fund, often for purposes like retirement savings plans or investment funds.

Ordinary Annuity

Equivalent monetary exchanges concluded after each sequential era over a predetermined course.