In Neoclassical Growth Theory, If the Rate of Return on Capital

question 75

Multiple Choice

In neoclassical growth theory, if the rate of return on capital increases due to a technological advance, then

• A)the rate of return on capital will eventually decline.
• B)capital per hour of labour will decrease.
• C)real GDP per hour of labour will decrease.
• D)the rate of return on capital will never decline.
• E)population growth will explode.

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Definitions:

Stale-dated Cheques

Cheques that have not been cashed or deposited within a specified time, often six months, rendering them invalid.

Balance Per Books

The account balance according to the company's accounting records, not necessarily reflecting bank or third-party records.

Bank Reconciliation

A process that explains the difference between the bank balance shown in an organization's bank statement, as provided by the bank, and the corresponding amount shown in the organization's own accounting records at a particular point in time.

Outstanding Cheques

Checks that have been written and recorded in the payor's ledger but have not yet been cashed or cleared by the bank.