Suppose the Romer Model Parameters in East Timor Are $\bar { A } _ { 0 } = 100$

question 42

Multiple Choice

Suppose the Romer model parameters in East Timor are $\bar { A } _ { 0 } = 100$ , $\bar { \ell } = 0.01 , \bar { z } = 1 / 500 \text {, and } \bar { L } = 10,000$
, while in North Timor they are $\bar { A } _ { 0 } = 10$
, $\bar { \ell } = 0.001 , \bar { z } = 1 / 1,000 \text {, and } \bar { L } = 20,000$
, then:

• A) neither country grows
• B) East Timor's per capita income growth rate is 20 percent and North Timor's is 2 percent
• C) East Timor's per capita income growth rate is 5 percent and North Timor's is 0.05 percent
• D) East Timor's per capita income growth rate is 100 percent and North Timor's is 1 percent
• E) each country's per capita income growth rate is 20 percent

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