Assume that two countries both have the per-worker production function y = k1/2, neither has population growth or technological progress, depreciation is 5 percent of capital in both countries, and country A saves 10 percent of output whereas country B saves 20 percent. If A starts out with a capital–labor ratio of 4 and B starts out with a capital–labor ratio of 2, in the long run:
A.
both A and B will have capital–labor ratios of 4.
B.
both A and B will have capital–labor ratios of 16.
C.
A's capital–labor ratio will be 4 whereas B's will be 16.
D.
A's capital–labor ratio will be 16 whereas B's will be 4.