Scenario: Consider Two Countries, Country a and Country B

question 228

Multiple Choice

Scenario: Consider two countries, Country A and Country B. Both countries have identical aggregate production functions, populations, and efficiency units of labor, but they have different technologies. The technology used in Country B is more advanced than that used in Country A.
-Refer to the scenario above.If the size of the population is the same in both countries,at the steady-state equilibrium,________.

• A) the physical capital stock will be the same in both countries
• B) the GDP per capita will be the same in both countries
• C) the GDP per capita of Country A will be higher than that of Country B
• D) the GDP per capita of Country B will be higher than that of Country A

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Definitions:

Illogical Reasoning

A process of thought or argumentation that is not based on sound or rational principles, often containing fallacies or errors in logic.

String Theory

A theoretical framework in physics that proposes that the fundamental particles are not point-like dots, but rather tiny, vibrating strings.

Variable

An element, feature, or factor that is likely to vary or change.

Hypothesis

A proposed explanation or assumption for a phenomenon, made as a starting point for further investigation, testable by experimentation or observation.