If the Marginal Product of Capital Net Depreciation Equals 8

question 12

Multiple Choice

If the marginal product of capital net depreciation equals 8 percent,the rate of growth of population equals 2 percent,and the rate of labour-augmenting technical progress equals 2 percent,to reach the Golden Rule level of the capital stock the ____ rate in this economy must be _____.

• A) saving; increased.
• B) population growth; decreased
• C) depreciation; decreased
• D) total output growth; decreased

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Definitions:

The Spread

The difference between two prices or rates, such as the bid and ask prices in trading or the yield on different securities.

IPO

Initial Public Offering, the process by which a private company goes public by selling its stocks to the general public for the first time.

Security Offerings

The process of issuing new securities to investors in order to raise capital for the corporation. This can include stocks, bonds, or other financial instruments.