10. At the current steady state capital-labor ratio, assume that the steady state level of per capita consumption, (C/N)*, is less than the golden rule level of steady state per capita consumption. Given this information, we can be certain that A. an increase in the saving rate will cause an increase in (C/N)*. B. a reduction in the capital-labor ratio will cause a reduction in (C/N)*. C. the capital labor ratio will tend to increase over time. D. a reduction in the saving rate may have an ambiguous effect on (C/N)*.

10. At the current steady state capital-labor ratio, assume that the steady state level of per capita consumption, (C/N), is less than the golden rule level of steady state per capita consumption. Given this information, we can be certain that A. an increase in the saving rate will cause an increase in (C/N). B. a reduction in the capital-labor ratio will cause a reduction in (C/N). C. the capital labor ratio will tend to increase over time. D. a reduction in the saving rate may have an ambiguous effect on (C/N).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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