Assume That a War Reduces a Country's Labour Force but Does

question 50

Multiple Choice

Assume that a war reduces a country's labour force but does not directly affect its capital stock. If the economy was in a steady state before the war and the saving rate does not change after the war, then, over time, capital per worker will _____, and output per worker will _____ as it returns to the steady state.

• A)decline; increase
• B)increase; increase
• C)decline; decrease
• D)increase; decrease