Question

Assume that a war reduces a country’s labor force but does not directly affect its capital stock. If the economy was in a steady state before the war and the saving rate does not change after the war, then, over time, what can you say about the growth rate of capital per worker and output per worker as compared to before he war?

Answer 1

A war reduces a country’s labor force but does not straightly affect its capital stock. If the economy was in a firm state before the war and the saving rate does not substitute after the war .  But war , always directly or indirectly hamper the lifestyle of citizens of the country .

After the war , The country has no to that much ability to creates a large number of jobs like they creates before war . The workers will not be able to get high payment , after the war because the country had alreday spent a lot of money in that war .

The dictionary chronicles war as an organized violent squabble engaged in by two or more separate social entities with the sole impetus of domination . The motivation power of workers totally lost after the war and sometime they have fear for works . War like experiences have a rippling effect on employees , chancing a long term negative impact on the social and economic reality of families and communities .

Wars often lead to increases in production , tighter labour markets , and higher ways .