As an economy adjusts to an increase in the saving rate, we would expect output per worker
A) to increase at a constant rate and continue increasing at that rate in the steady state.
B) to increase at a permanently higher rate.
C) to decrease at a permanently higher rate.
D) to return to its original level.
E) none of the above
E
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Does the production function in the table above exhibit diminishing returns? Explain
What will be an ideal response?
If the real exchange rate between the U.S. and Argentina is 1, then
a. purchasing-power parity holds, and 1 U.S. dollar buys 1 Argentinean bolivar. b. purchasing-power parity holds, and the amount of dollars needed to buy goods in the U.S. is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina. c. purchasing-power parity does not hold, but 1 U.S. dollar buys 1 Argentinean bolivar. d. purchasing-power parity does not hold, but the amount of dollars needed to buy goods in the U.S. is the same as the amount needed to buy enough Argentinean bolivars to buy the same goods in Argentina.