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.If the size of the population is the same in both countries,at the steady-state equilibrium,________.

A) the physical capital stock will be the same in both countries
B) the GDP per capita will be the same in both countries
C) the GDP per capita of Country A will be higher than that of Country B
D) the GDP per capita of Country B will be higher than that of Country A

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free