Author Question: Suppose a poor economy inches towards the steady state in Solow's exogenous growth model. What ... (Read 108 times)

jayhills49 · **on:** Jun 30, 2018

Suppose a poor economy inches towards the steady state in Solow's exogenous growth model. What happens?

A) Consumption per capita decreases.
B) Saving per capita decreases.
C) The depreciation rate increases.
D) The growth rate of output decreases.

Question 2

If workers sit idly by for a portion of their workday, but are still employed, ________.

A) the negative productivity shock has no effect on output
B) it is unlikely that a decrease in aggregate demand is the cause
C) aggregate data may create a false illusion of a negative productivity shock
D) a negative productivity shock is the most plausible explanation