Suppose There Is a Reduction in the Saving Rate

question 5

Multiple Choice

Suppose there is a reduction in the saving rate.This decrease in the saving rate will cause a reduction in which of the following once the economy reaches its new steady state equilibrium?

• A)growth rate of output
• B)growth rate of capital
• C)growth rate of capital per worker
• D)all of the above
• E) none of the above

---

Definitions:

Asset-backed Securities

Financial instruments backed by a pool of assets, such as loans or receivables, which generate revenue for investors.

Executive Compensation

The financial pay and benefits provided to executives, including salaries, bonuses, stocks, and other compensation forms.

Ancillary Relief

Secondary legal remedies or supports requested in a lawsuit, often relating to financial support or property distribution in family law.

Disgorgement of Profits

A legal remedy requiring a party to surrender profits gained through wrongful conduct to prevent unjust enrichment.