If a Country's Saving Preference Increased from 10 Percent to 12

question 113

Multiple Choice

If a country's saving preference increased from 10 percent to 12 percent of disposable income and it was operating at its steady state before the change, we would expect to see which of the following? I. a decrease in capital stock II. a decrease in real GDP III. an increase in real GDP IV. an increase in capital stock

• A) I and II only
• B) II and III only
• C) III and IV only
• D) I and III only

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Definitions:

Past-Due

Referring to a payment or obligation that has not been met by its deadline.

Breach of Contract

The failure to perform as specified in a legally binding contract, which can lead to legal actions and damages.

Disputed Claim

A contested assertion of a right or demand that is subject to disagreement between parties.

Past Obligation

Obligations or duties that were required or expected to be fulfilled in the past.