Scenario: Consider Two Countries, Country a and Country B

Scenario: Consider two countries, Country A and Country B. Both countries have identical aggregate production functions, populations, and efficiency units of labor, but they have different technologies. The technology used in Country B is more advanced than that used in Country A.
-Refer to the scenario above.Which of the following statements will be true in steady state?

A) Country A will have greater physical capital stock and lower GDP than Country B.
B) Country A will have greater physical capital stock and GDP than Country B.
C) Country A will have lower physical capital stock and higher GDP than Country B.
D) Country A will have lower physical capital stock and GDP than Country B.

Correct Answer:

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