If a Natural Disaster Destroys a Large Portion of a Country's

question 113

Multiple Choice

If a natural disaster destroys a large portion of a country's capital stock but the saving and depreciation rates are unchanged, the Solow model predicts that the economy will grow and eventually reach:

• A) the same steady-state level of output as it would have before the disaster.
• B) a higher steady-state level of output than it would have before the disaster.
• C) a lower steady-state level of output than it would have before the disaster.
• D) Not enough information is given.
• E) None of these answers is correct.

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Definitions:

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Productivity

The measure of efficiency in producing goods and services, often evaluated in terms of output per unit of input.

Timeliness

The quality of being done within an expected or appropriate time frame.

Unbundling

Coding the individual parts of a specific diagnosis or procedure rather than one combination or bundle that includes all of those components.