If the Current Capital Stock in South Korea Is Greater

question 55

Multiple Choice

If the current capital stock in South Korea is greater than the current capital stock in China, and total factor productivity is the same in both countries, according to the principle of transition dynamics:

• A) China initially will grow faster than South Korea, but each will have the same steady state.
• B) China initially will grow slower than South Korea, but each will have the same steady state.
• C) China initially will grow faster than South Korea and will have a higher steady state.
• D) China initially will grow faster than South Korea and will have a lower steady state.
• E) both South Korea and China initially will grow at the same rate and have the same steady state.

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Definitions:

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