If Two Economies Are Identical (Including Having the Same Saving

question 10

Multiple Choice

If two economies are identical (including having the same saving rates, population growth rates, and efficiency of labor) , but one economy has a smaller capital stock, then the steady-state level of income per worker in the economy with the smaller capital stock:

• A) will be at a lower level than in the steady state of the high capital economy.
• B) will be at a higher level than in the steady state of the high capital economy.
• C) will be at the same level as in the steady state of the high capital economy.
• D) will be proportional to the ratio of the capital stocks in the two economies.

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Definitions:

Chromatography

A method used to separate and analyze components of a mixture by passing it through a medium where components move at different rates.

Slightly Different Speed

A variation in velocity, indicating a small but noticeable change in the rate of motion compared to another object or compared to a previous state.

Neutrons

Subatomic particles found in the nucleus of an atom, having no electric charge and a mass about equal to that of protons.