Question

Which of the following are true? choose all that apply

A) Cross country evidence from post WW2 suggests a strong scale effect; more populous countries grow faster

B) Capital per worker tends to grow steadily over time

C) The ratio of output to capital has steadily declined over time

D) Output per worker tends to grow steadily over time

Answer 1

A)cross country evidence from pst WW2 suggests a strong scale effect, more populous countries grow faster.

C) the ratio of output capital has steadily declined over time.

these two statements are true.

B) capital per worker tends to grow steadily over time and

d) output per worker tends to grow steadily over time.

both the statements are false.

because of both outputs per worker and capital per worker are follows CRS according to Solow's steady-state model under the law of motion of capital.

K* is the steady state capital per worker

Y* is is the steady state output per worker

both follows constant Returns to scale.