The reason that an increase in α in the production function y = Akα makes growth more responsive to investment is:
A) the higher the coefficient α, the more curved the production function becomes.
B) the higher the coefficient α, the lower the production function becomes.
C) the higher the coefficient α, the straighter is the related saving function.
D) the more curved is the related saving function, the more the steady state is affected by changes in the saving rate σ, population growth n, and depreciation δ.
Correct Answer:
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Q2: An implication of the AK model is
Q3: The fundamental logic behind the AK model
Q4: In Rebelo's AK model, the parameter α
Q5: In Rebelo's AK model, the production function
Q6: In the AK model, the capital stock
Q7: The AK model is important because:
A) investment
Q8: In the Cobb-Douglas production function, the closer
Q9: All things equal, an economy with a
Q10: The AK model generates permanent economic growth
Q11: The S-curve graphically illustrates:
A) the relationship between
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