question archive This question is on the Solow growth model
This question is on the Solow growth model
Subject:EconomicsPrice: Bought3
This question is on the Solow growth model.
Consider two countries which do not borrow from, or lend to, the rest of the world. Both countries have the same technology and their populations grow at the same rate. Assume further that the capital stock per effective worker is below the golden rule capital stock per effective worker. Consumers in country A save a larger share of their income than consumers in country B. Which of the following statements is correct if we consider the very long run (the steady state)?
Select one or more:
a. Consumption per effective worker is higher in country A
b. GDP grows faster in country A
c. Consumption per effective worker is higher in country B
d. GDP grows faster in country B
