Answer to Question #151883 in Macroeconomics for Bamuu Bugila Abdul Jalilu

Question

7). When the saving rate is equal to the capital income share in the Solow model
A. the elasticity of consumption per effective worker with respect to saving rate is 0
B. the steady state level of capital per efficient worker is 0
C. there are no reasons for the benevolent social planner to change the saving rate
D. there is no possibility to increase consumption per efficient worker
8). When the stock of capital per efficient worker is greater than that of the golden rule level
A. the economy cannot be in the steady state
B. the economy is dynamically inefficient
C. the economy grows faster
D. the economy is dynamically efficient
9). The Solow model predicts that an increase in the private saving rate has
A. NO temporary level effect on consumption per worker
B. NO permanent level effect on consumption per worker
C. NO temporary growth effect on consumption per worker
D. NO permanent growth effect on consumption per worker

Answer 1

7) B. the steady state level of capital per efficient worker is 0

8)A. the economy cannot be in the steady state

9) D. NO permanent growth effect on consumption per worker