Consider two economies: A and B that are completely similar, except their savings rate. The savings rate in economy A is greater than the savings rate in economy B. Which of the following statements is true?
A) Capital accumulation will be faster in economy B in comparison to economy A.
B) Capital accumulation will be faster in economy A in comparison to economy B.
C) Rate of capital accumulation will be the same in both economies.
D) Growth rate in country B is likely to be higher than the growth rate of country A in the long-run.
B
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Assuming all else equal, if the real interest rate increases, it will lead to:
A) a decrease in the quantity of credit demanded by a firm. B) a rightward shift of the credit demand curve of a firm. C) a leftward shift of the credit demand curve of a firm. D) an increase in the quantity of credit demanded by a firm.
The slope of the consumption function is also known as
a. the consumption ratio b. the average propensity to consume c. autonomous consumption spending d. the marginal propensity to consume e. multiplying propensity to consume