Suppose Two Countries Are Identical in Every Way with the Following

question 51

Multiple Choice

Suppose two countries are identical in every way with the following exception.Economy A has a higher saving rate than economy B.Given this information,we know with certainty that

• A)steady state consumption in A is higher than in B.
• B)steady state consumption in A is lower than in B.
• C)steady state consumption in A and in B are equal.
• D)steady state growth of output per worker is higher in A than in B.
• E) none of the above

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Definitions:

Contingent Liability

A potential obligation that may arise in the future depending on the occurrence of a certain event.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity.

Numerical Probability

A quantifiable measure that expresses the likelihood of occurrence of an event, presented as a number between 0 and 1.

Gross Earnings

Gross Earnings are the total amount earned by an individual or entity before any deductions such as taxes, benefits, and other payroll deductions.