If climate change impacts (e.g., increased heat waves, droughts, wildfires, etc.) decrease the economy's technology level A, then, through the lens of the Solow growth model (and assuming the economy was originally in a steady-state), holding all else constant, we would expect it to: O A. Decrease steady-state capital, decrease steady-state output, uncertain impact on steady-state consumption O B. Increase steady-state capital, increase steady-state output, uncertain impact on steady-state consumption OC. No impact on steady-state capital, decrease steady-state output, decrease steady-state consumption O D. Decrease steady-state capital, decrease steady-state output, decrease steady-state consumption If households are worried about climate change and this concern increases their savings rate, then holding all else constant (including A, so focusing only on the change in savings rates), we would expect it to: O A. Increase steady-state capital, increase steady-state output, decrease steady-state consumption O B. Decrease steady-state capital, decrease steady-state output, uncertain impact on steady-state consumption OC. Decrease steady-state capital, decrease steady-state output, decrease steady-state consumption O D. Increase steady-state capital, increase steady-state output, uncertain impact on steady-state consumption
If climate change impacts (e.g., increased heat waves, droughts, wildfires, etc.) decrease the economy's technology level A, then, through the lens of the Solow growth model (and assuming the economy was originally in a steady-state), holding all else constant, we would expect it to: O A. Decrease steady-state capital, decrease steady-state output, uncertain impact on steady-state consumption O B. Increase steady-state capital, increase steady-state output, uncertain impact on steady-state consumption OC. No impact on steady-state capital, decrease steady-state output, decrease steady-state consumption O D. Decrease steady-state capital, decrease steady-state output, decrease steady-state consumption If households are worried about climate change and this concern increases their savings rate, then holding all else constant (including A, so focusing only on the change in savings rates), we would expect it to: O A. Increase steady-state capital, increase steady-state output, decrease steady-state consumption O B. Decrease steady-state capital, decrease steady-state output, uncertain impact on steady-state consumption OC. Decrease steady-state capital, decrease steady-state output, decrease steady-state consumption O D. Increase steady-state capital, increase steady-state output, uncertain impact on steady-state consumption
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:If climate change impacts (e.g., increased heat waves, droughts, wildfires, etc.) decrease the economy's technology level A, then, through the lens of the Solow growth
model (and assuming the economy was originally in a steady-state), holding all else constant, we would expect it to:
O A. Decrease steady-state capital, decrease steady-state output, uncertain impact on steady-state consumption
O B. Increase steady-state capital, increase steady-state output, uncertain impact on steady-state consumption
OC. No impact on steady-state capital, decrease steady-state output, decrease steady-state consumption
O D. Decrease steady-state capital, decrease steady-state output, decrease steady-state consumption
If households are worried about climate change and this concern increases their savings rate, then holding all else constant (including A, so focusing only on the
change in savings rates), we would expect it to:
O A. Increase steady-state capital, increase steady-state output, decrease steady-state consumption
O B. Decrease steady-state capital, decrease steady-state output, uncertain impact on steady-state consumption
O C. Decrease steady-state capital, decrease steady-state output, decrease steady-state consumption
O D. Increase steady-state capital, increase steady-state output, uncertain impact on steady-state consumption
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