Question

Question 12 2 pts Suppose there are two very similar countries (call them G and H). Both countries have the same population and both are experiencing population growth at the same rate (that is, N and 9N are identical in both countries). Both countries depreciate capital at the same rate, the both have the same savings rate, they both have the same technology, and technological progress happens at the same rate in both countries. Suppose that currently both countries are in steady state, when an earthquake destroys half of the capital stock of Country G, and also kills half of its population. We would expect That Country G's output per effective worker(#) will grow faster than That Country H's output per effective worker(#) will grow faster than O That Country H's output (Y) will be higher than Country G's only for some O That Country H's output (Y) will be higher than Country G's permanently Country H's only for some time. AN Country G's only for some time. time.

Answer 1

Answer is option d)

since we assume solow model, so no growth rate of per capita effective output thus option a & b is wrong.