When Steady State Capital Per Worker Is Above the Golden-Rule

question 6

Multiple Choice

When steady state capital per worker is above the golden-rule level,we know with certainty that an increase in the saving rate will

• A)increase consumption in both the short run and the long run.
• B)decrease consumption in both the short run and the long run.
• C)decrease consumption in the short run, and increase it in the long run.
• D)increase consumption in the short run, and decrease it in the long run.
• E) none of the above

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