Author Question: In the neoclassical growth model, if two countries are exactly the same but one has a lower ... (Read 22 times)

s.tung · **on:** Jun 30, 2018

In the neoclassical growth model, if two countries are exactly the same but one has a lower permanent budget deficit, we would expect that country to have

a. higher output, a higher capital-to-labor ratio, and higher output growth in the steady state.
b. the same output and capital-to-labor ratio, but higher output growth in the steady state.
c. higher output, the same capital-to-labor ratio, and the same output growth in the steady state.
d. higher output, a higher capital-to-labor ratio, and the same output growth in the steady state.

Question 2

There is no possible economic relationship between the birth rate and the availability of arable land.

Indicate whether the statement is true or false