In the Solow Model,it Is Assumed That A(n)__________ Fraction of Capital

question 45

Multiple Choice

In the Solow model,it is assumed that a(n) __________ fraction of capital depreciates regardless of the capital stock.

• A)increasing
• B)constant
• C)decreasing
• D)undetermined
• E)none of the above

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Definitions:

Dividends

Return on capital of corporation paid by company to shareholders in either cash or stock; payments made out of a firm’s earnings to its owners, either in cash or stock.

Foreign Subsidiary

A foreign subsidiary is a company owned or controlled by another company, referred to as the parent company, which is located in a country different from the subsidiary.

Dollar/Peso Exchange Rate

The rate at which the currency of the United States (dollar) can be exchanged for the currency of countries using the peso.

Short Run Exchange Rate Risk

Short run exchange rate risk pertains to the potential for losses that investors or companies face due to fluctuations in the exchange rates between currencies in the near term.