ECON304 o Which of the follonwing statements is always true

ECON-304 o Which of the follonwing statements is always true in the most basic growth model, in A) Investment always equals depreciation. B) Investment equals the capital stock minus depreciation. C) The capital stock is equal to investment minus depreciation D) Any change in the capital stock is equal to investment minus depreciation. D When a basic capitalist economy is operating at the steady state, we know that, A) saving equals consumption. B) saving is less than total consumption. C) savings per worker are equal to depreciation per worker. saving exceeds depreciation each year by a constant amount.

Solution

6.

D

Capital stock is created over a period of time. A change in it is observed by the difference level in investments and depreciation. It will be added as a change in capital stock in the economy.

7.

C

In a steady stage condition in the economy, the saving per worker will be equal to the depreciation per worker in the economy.