Scenario: Consider two countries, Country A and Country B. Both countries have identical aggregate production functions, populations, and efficiency units of labor, but they have different technologies. The technology used in Country B is more advanced than that used in Country A.
-Refer to the scenario above.If the size of the population is the same in both countries,at the steady-state equilibrium,________.

Question

Quizplus · Accepted Answer

Since Country B has more advanced technology, it will have a higher level of output per unit of capital compared to Country A. This will lead to a higher GDP per capita in Country B than in Country A. Therefore, at the steady-state equilibrium, the GDP per capita of Country B will be higher than that of Country A.

Scenario: Consider Two Countries, Country a and Country B