An Increase in the Investment Rate Results In

question 68

Multiple Choice

An increase in the investment rate results in:

• A) a lower steady-state capital stock and a lower steady-state output.
• B) a lower steady-state capital stock but a higher steady-state output.
• C) a higher steady-state capital stock and a higher steady-state output.
• D) a higher steady-state capital stock but a lower steady-state output.

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Definitions:

Public Saving

The difference between a government's total revenue and its total expenditures, reflecting the surplus or deficit in the public sector's budget.

Private Saving

Private saving is the portion of households' and businesses' income that is not spent on consumption or paying taxes, and is instead saved for future use.

National Saving

The total saving of an economy, consisting of both private saving (by households and businesses) and public saving (government surplus).

Private Saving

The portion of households' income that is not used for consumption or paying taxes, but instead is saved.