At the current steady state capital-labor ratio,assume that the steady state level of per capita consumption,(C / N)*,is greater than the golden rule level of steady state per capita consumption.Given this information,we can be certain that
A)a reduction in the saving rate will cause a decrease in the steady state level of per capita consumption ((C / N)*).
B)an increase in the capital-labor ratio will cause an increase in (C / N)*.
C)the capital labor ratio will tend to decrease over time.
D)the capital labor ratio will tend to increase over time.
E) a reduction in the saving rate will have an ambiguous effect on (C / N)*.

Question

Quizplus · Accepted Answer

The Answer of At the current steady state capital-labor ratio,assume that the steady state level of per capita consumption,(C / N)*,is greater than the golden rule level of steady state per capita consumption.Given this information,we can be certain that
A)a reduction in the saving rate will cause a decrease in the steady state level of per capita consumption ((C / N)*).
B)an increase in the capital-labor ratio will cause an increase in (C / N)*.
C)the capital labor ratio will tend to decrease over time.
D)the capital labor ratio will tend to increase over time.
E) a reduction in the saving rate will have an ambiguous effect on (C / N)*.

At the Current Steady State Capital-Labor Ratio,assume That the Steady