Suppose there are two very similar countries (call them Countries C and D). Both

Question

Suppose there are two very similar countries (call them Countries C and D). Both countries have the same population, and they are both experiencing the same population growth (that is, N is identical in both countries, and grows at the same rate (g_N). Both countries also depreciate capital at the same rate (d) Suppose that both countries have the same technology and experience the same technological progress (g_a) is identical in both countries), and that we observe that both countries are in steady state. True or false, consumption per effective worker (C/AN) must be equal in both countries. True False Suppose there are two very similar countries (call them Countries C and D). Both countries have the same population, and they are both experiencing the same population growth (that is, N is identical in both countries, and grows at the same rate(g_N). Both countries also depreciate capital at the same rate (d). Suppose that both countries have the same technology and experience the same technological progress (g - a) is identical in both countries), and that we observe that both countries are in steady state. True or false, output per worker (C/AN) must be equal in both countries. True False

Explanation / Answer

3. TRUE .If AN is the effective worker and C is the consumption then consumption per effective worker is C/AN .

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