Suppose the Following Situation Exists for an Economy: Kt₊₁

question 16

Multiple Choice

Suppose the following situation exists for an economy: Kt₊₁ / N < Kt / N.Given this information,we know that

• A)saving per worker equals depreciation per worker in period t.
• B)consumption per worker will tend to fall as the economy adjusts to this situation.
• C)saving per worker is greater than depreciation per worker in period t.
• D)the saving rate increased in period t.
• E) none of the above

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Definitions:

Lbs

An abbreviation for pounds, a unit of weight commonly used in the United States and the British imperial system; not directly a financial term unless related to commodities trading.

Coffee Futures

Financial contracts obligating the buyer to purchase coffee, and the seller to sell coffee, at a predetermined future date and price.

Pounds

A unit of mass commonly used in the British imperial and United States customary systems, equivalent to 0.453592 kilograms.

Marking to Market

The practice of updating the value of a financial instrument to reflect its current market value.