Scenario: Two Countries (A and B) Have the Same Aggregate

question 180

Multiple Choice

Scenario: Two countries (A and B) have the same aggregate production function, the same level of technology, the same depreciation rate, and the same level of human capital. However, the saving rate is higher in country A than in country B.
-Refer to the scenario above.In the short run,which country must have the higher GDP?

• A) Country A's GDP must be higher than Country B's GDP.
• B) Country B's GDP must be higher than Country A's GDP.
• C) The two countries' GDPs must be equal.
• D) There is no way to determine which country's GDP must be higher from the information given.

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Predictable Situations

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