Suppose an Economy Experiences an Increase in the Saving Rate

question 61

Multiple Choice

Suppose an economy experiences an increase in the saving rate. We know with certainty that this increase in the saving rate will:

• A) increase steady state consumption only if the new saving rate is less than the golden rule rate.
• B) decrease steady state consumption only if the new saving rate is less than the golden rule rate.
• C) have no effect on steady state consumption.
• D) increase steady state consumption.
• E) decrease steady state consumption.

---

Definitions:

Basic Food Group

Categories of food sharing similar nutritional properties, such as grains, vegetables, fruits, dairy, and proteins, essential for a balanced diet.

MyPlate

A visual guide created by the USDA to help Americans understand and follow healthy eating patterns, utilizing a plate divided into portions of fruits, vegetables, grains, proteins, and dairy.

Mediterranean Diet

A dietary pattern traditionally followed in countries bordering the Mediterranean sea, emphasizing fruits, vegetables, whole grains, olive oil, and fish.

Olive Oil

A type of oil extracted from olives, highly praised for its health benefits, including heart-healthy monounsaturated fats.