In a Steady State with Population Growth and Technological Progress

question 19

Multiple Choice

In a steady state with population growth and technological progress:

• A) the capital share of income increases.
• B) the labor share of income increases.
• C) the capital share of income, in some cases, increases, and sometimes the labor share increases.
• D) the capital and labor shares of income are constant.

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Definitions:

Transactions Exposure

The potential for a company's cash flows to be affected by changes in exchange rates due to transactions in foreign currencies.

Financial Risk

Financial risk involves the possibility that a company's cash flow will not be sufficient to meet its obligations, which can result from volatility in the markets, business operations, or creditworthiness.

Commodity Swap

A financial agreement where two parties exchange cash flows related to a specific commodity's price.

Short-Term Price Movements

Fluctuations in the price of securities that occur within a brief period, often influenced by market sentiment and news.