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1. income of western European countries is 75% in US level, however, western Eur

ID: 1152121 • Letter: 1

Question

1. income of western European countries is 75% in US level, however, western European countries tend to work less, high life expectancy. so, western European countries have similar welfare levels to the US. True or false?

2. the rate of technological progress increase, always reduce the consumption in the short run and the long run. true or false?

3. the saving rate increase always lead to consumption decrease in short run and increase in long run. true or false?

4.

In theory, a lower fertility rate and an aging population will definitely cause saving rate to decrease. true or false?

Explanation / Answer

1. False

Welfare can't be determined by income levels. We need to look into redistribution of wealth.

2 .False,

The increase will shoot the output up. This will lead to increase in income. Which will lead to increase in consumption.

3. True

We will consume less in short run. In long run, the saving will turn into investment and increase our income.

4. False

It should be a function of working population.