Starting from a Steady-State Situation, If the Saving Rate Increases

question 38

Multiple Choice

Starting from a steady-state situation, if the saving rate increases, the rate of growth of capital per worker will:

• A) increase and continue to increase unabated.
• B) increase until the new steady state is reached.
• C) decrease until the new steady state is reached.
• D) decrease and continue to decrease unabated.

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