If the Capital-Labor Ratio Is Above the Golden Rule Capital-Labor

question 39

Multiple Choice

If the capital-labor ratio is above the Golden Rule capital-labor ratio,then in the steady state,

• A)capital per worker is above its maximum.
• B)output per worker is less than it would be at the Golden Rule capital-labor ratio.
• C)investment per worker exceeds output per worker.
• D)consumption per worker is not at its maximum.

---

Definitions:

Capital Deficit Balances

Situations where a company's total capital is less than zero, indicating that its liabilities exceed its assets.

Recorded Capital Account

An account on a company's balance sheet that represents the shareholders' equity invested in the business, either by contributing capital or retaining earnings.

Distribution

The process of allocating assets, such as cash dividends or stock shares, to shareholders as part of the earnings generated by a company.

Final Settlement

The completion of a financial transaction where the seller delivers the agreed goods or assets and the buyer pays for them as per the terms of the contract.