Macroeconomics Study Set 47
Quiz 11 :
Saving, Capital Accumulation and Output
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Q19 Q19 Q19
Suppose, due to the effects of a military conflict that has ended, that a country experiences a large decrease in its capital stock. Assume no other effects of this event on the economy. Which of the following will tend to occur as the economy adjusts to this situation?
Q51 Q51 Q51
The empirical evidence indicates that most OECD countries are far below their golden- rule level of capital. What are the practical limitations of raising the saving rate closer to the golden- rule level? How close to the golden rule should governments try to get? Why?
Q62 Q62 Q62
Suppose the saving rate is greater than the golden rule saving rate (sG). First, explain what must happen to the saving rate in order to increase steady state consumption. Second, what are the advantages and disadvantages of this policy to increase steady state consumption.