If an Economy Is in a Steady State with No

question 79

Multiple Choice

If an economy is in a steady state with no population growth or technological change and the capital stock is below the Golden Rule:

• A) a policymaker should definitely take all possible steps to increase the saving rate.
• B) if the saving rate is increased, output and consumption per capita will both rise, both in the short and long runs.
• C) if the saving rate is increased, output per capita will at first decline and then rise above its initial level, and consumption per capita will rise both in the short and long runs.
• D) if the saving rate is increased, output per capita will rise and consumption per capita will first decline and then rise above its initial level.

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Definitions:

Binomial Distribution

A probability distribution that represents the number of successes in a fixed number of trials, each with the same probability of success.

Alpha

In statistics, it denotes the significance level used in hypothesis testing, typically set to 0.05 or 5%, representing the probability of rejecting the null hypothesis when it is actually true.

Likelihood

The probability of a particular outcome given a set of parameters within a statistical model.

Binomial Variable

A type of discrete variable that can take one of two independent values, often representing success or failure in an experiment.