In the Two-Sector Endogenous Growth Model, the Steady-State Stock of Physical

question 90

Multiple Choice

In the two-sector endogenous growth model, the steady-state stock of physical capital is determined by _____, and the growth in the stock of knowledge is determined by _____.

• A) the fraction of labor in universities; the saving rate
• B) the efficiency of labor; the saving rate
• C) the production function; the efficiency of labor
• D) the saving rate; the fraction of labor in universities

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Definitions:

Transfer Price

The price at which goods and services are sold between divisions within the same company, often used for accounting and tax purposes.

Variable Cost

A cost that varies directly and proportionally with changes in production volume or activity level, such as materials and labor costs.

Profit Margin

The ratio of a company's net income to its revenue, indicating the percentage of profit made from sales.

Operating Expenses

Expenses incurred through normal business operations, such as rent, utilities, and payroll.