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)saving per worker is less than depreciation per worker in period t.
C)saving per worker is greater than depreciation per worker in period t.
D)the saving rate fell in period t.
E)none of the above

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)saving per worker is less than depreciation per worker in period t.
C)saving per worker is greater than depreciation per worker in period t.
D)the saving rate fell in period t.
E)none of the above

Quizplus · Accepted Answer

The inequality Kt+1 / N > Kt / N implies that the capital per worker in period t+1 is greater than the capital per worker in period t. This can happen only if saving per worker in period t is greater than the depreciation per worker, which means that option C is correct.

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