If Y = K^1/2, the Country Saves 10 Percent of Its

question 46

Multiple Choice

If y = k^1/2, the country saves 10 percent of its output each year, and the steady-state level of capital per worker is 4, then the steady-state levels of output per worker and consumption per worker are:

• A) 2 and 1.6, respectively.
• B) 2 and 1.8, respectively.
• C) 4 and 3.2, respectively.
• D) 4 and 3.6, respectively.

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Definitions:

Unskilled Workers

Workers who have no specific training or specialized skills and usually perform simple tasks that require limited education.

Minimum Wage

The minimum wage permitted by law that employers can pay their employees, whether it's calculated by the hour, day, or month.

Backward-Bending Labor Supply Curve

As the wage rate rises, more and more people are willing to work longer and longer hours up to a point. They will then substitute more leisure time for higher earnings.

Hourly Wage

Compensation paid based on the number of hours worked, typically expressed as a rate per hour.