According to the neoclassical growth model, if a country makes a policy change to increase its savings rate, in the new steady state:
a. output per worker will grow faster than before.
b. output per worker will grow at the rate of technology growth.
c. capital per worker will be permanently higher.
d. all of the above.
D
Economics
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The economic theory of government predicts elected officials at the federal level will have incentives to act in ways that
A) cause inflation. B) increase uncertainty and the instability of total demand. C) secure short-term economic gains with deferred costs. D) result in all of the above. E) result in none of the above because they will usually want to be reelected.
Economics
If the required reserve ratio is 20 percent, the simple deposit multiplier is
A) 5.0. B) 2.5. C) 4.0. D) 10.0.
Economics