A Country in a Steady State Invests 50% of Its

question 138

Multiple Choice

A country in a steady state invests 50% of its output in new capital ( = 0.5) and depreciates 5% of its capital stock ( = .05) .With a capital stock of 100 units,labor remains constant.Because of technological innovation,production improves from Y = to Y = 2 C:\Users\user\Dropbox\Quizplus Parsing Documents\To Be Parsed\NEW Files\Answers End Chapter sent to mahdi\TB3376,Modern Principles Macroeconomics 3rd Edition by Tyler Cowen\TB3376,Modern Principles Macroeconomics 3rd Edition by Tyler Cowen\Images\Chapter 8 (28) - Growth,Capital Accumulation_18.jpg
.What is the new steady-state level of output?

• A) 10
• B) 20
• C) 40
• D) 80

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