Suppose two countries are identical in every way with the following exception.Economy A has a greater quantity of human capital than economy B.Given this information,we know with certainty that
A)steady state consumption in A is higher than in B.
B)steady state consumption in A is lower than in B.
C)steady state consumption in A and in B are equal.
D)steady state growth of output per worker is higher in A than in B.

Question

Quizplus · Accepted Answer

A higher quantity of human capital in Economy A compared to Economy B typically leads to higher productivity, which in turn results in higher output and thus higher steady state consumption.

Suppose Two Countries Are Identical in Every Way with the Following