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Suppose the Romer Model Parameters in East Timor Are Aˉ0=100\bar { A } _ { 0 } = 100

Question 45

Multiple Choice

Suppose the Romer model parameters in East Timor are Aˉ0=100\bar { A } _ { 0 } = 100 , ˉ=0.01,zˉ=1/500, and Lˉ=10,000\bar { \ell } = 0.01 , \bar { z } = 1 / 500 \text {, and } \bar { L } = 10,000
, while in North Timor they are Aˉ0=10\bar { A } _ { 0 } = 10
, ˉ=0.001,zˉ=1/1,000, and Lˉ=20,000\bar { \ell } = 0.001 , \bar { z } = 1 / 1,000 \text {, and } \bar { L } = 20,000
, then:


A) neither country grows
B) East Timor's per capita income growth rate is 20 percent and North Timor's is 2 percent
C) East Timor's per capita income growth rate is 5 percent and North Timor's is 0.05 percent
D) East Timor's per capita income growth rate is 100 percent and North Timor's is 1 percent
E) each country's per capita income growth rate is 20 percent

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