Answer to Question #151882 in Macroeconomics for Bamuu Bugila Abdul Jalilu

Question

4). The AK model predicts that changes in the private savings rate have NO
A. permanent level effect on consumption per worker
B. temporary growth effect on consumption per worker
C. effect on the transition time needed to reach the new balanced growth path
D. temporary level effect on consumption per worker
5). When the Solow economy is dynamically inefficient
A. the slope of the break-even investment line is greater than the marginal product of capital
B. the break-even investment line does not cross the actual saving line
C. the slope of the break-even investment line is equal to the marginal product of capital
D. the slope of the break-even investment line is smaller to the marginal product of capital
6). The balanced growth path of the Solow model with positive technological progress features
A. a constant share of output going to labour
B. a decreasing share of output going to capital
C. a constant ratio of the labour stock to GDP
D. an increasing share of output going to capital

Answer 1

4) C,

5) C,

6) D.