Assume there is a permanent reduction in the rate of technological progress What
ID: 1162092 • Letter: A
Question
Assume there is a permanent reduction in the rate of technological progress What is the likely impact on the growth rate and the level of output per worker in the short run and in the long run? O A. The growth rate of output per worker rises in the short run. In the long run, the growth rate approaches a new steady state with a higher growth O B. The growth rate of output per worker falls in the short run. In the long run, the growth rate approaches a new steady state with a permanently lower O C. The growth rate of output per worker falls in the short run. In the long run, the growth rate approaches a new stoady state with a permanenty lower o D. There is no effect on the growth rate of output per worker Output per worker continues to rise over time, just at a slower rate. Assume there is a permanent reduction in the saving rate What is the likelv imoact on the arowth rate and the level of outout oer worker in the short run and in the lona rate. Output per worker continues to rise over time. growth rate. Output per worker will also decrease over time. growth rate. Output per worker continues to rise over time, just at a slower rate.Explanation / Answer
"B"
The growth rate of output per worker will fall in the short run, in the long run, the growth rate approaches a new steady state with a permanently lower growth rate. output per worker will decrease over time.