If a Larger Share of National Output Is Devoted to Investment

question 14

Multiple Choice

If a larger share of national output is devoted to investment, starting from an initial steady-state capital stock below the Golden Rule level, then productivity growth will:

• A) increase in the short run but not in the long run.
• B) increase in the long run but not in the short run.
• C) increase in both the short run and the long run.
• D) not increase in either the short run or the long run.

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Definitions:

Urban Areas

Regions characterized by high population density and vast human features in comparison to areas surrounding it.

Cultural Tools

involve artifacts, symbols, and practices that a society uses to mediate thinking, communication, and understanding.

Time Orientation

The way in which individuals or cultures perceive and value time, which can affect planning, punctuality, and the emphasis on past, present, or future events.

The Present

The current moment or period in time, distinguished from the past and the future.