The Balanced Growth Property of the Solow Growth Model with Population

question 82

Multiple Choice

The balanced growth property of the Solow growth model with population growth and technological progress predicts which of the following sets of variables will grow at the same rate in the steady state?

• A) output per effective worker, capital per effective worker, real wage
• B) output per worker, capital per worker, real wage
• C) real rental price of capital, real wage, output per worker
• D) capital-output ratio, output per worker, capital per worker

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Definitions:

Selling Short

The investment strategy of selling securities one does not currently own, with the expectation of buying them back later at a lower price.

Mark-To-Market

An accounting method where the value of assets and liabilities is adjusted to their current market values rather than being recorded at their original cost.

Tax Year

A 12-month period used for tax purposes, determining the timeframe over which income, deductions, and tax payments are calculated and reported.

Realize

To convert assets into cash or to acknowledge revenue or a profit in accounts.