Suppose the following situation exists for an economy: Kt₊₁ / N

Question

Suppose the following situation exists for an economy: Kt₊₁ / N < Kt / N.Given this information,we know that
A)saving per worker equals depreciation per worker in period t.
B)consumption per worker will tend to fall as the economy adjusts to this situation.
C)saving per worker is greater than depreciation per worker in period t.
D)the saving rate increased in period t.
E) none of the above

Quizplus · Accepted Answer

The given situation, $K_{t+1} / N < K_t / N$, indicates that the capital per worker in the next period is less than the capital per worker in the current period. This could be due to several factors such as depreciation outpacing savings, a decrease in the saving rate, or an increase in the worker population, but it does not specifically imply any of the provided options (A, B, C, D) without additional information.

Suppose the Following Situation Exists for an Economy: Kt₊₁