Suppose There Is an Increase in the Saving Rate

question 15

Essay

Suppose there is an increase in the saving rate.Explain what effect this increase in the saving rate will have on the rate of growth of output per worker.

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Definitions:

Dominant Strategy

In game theory, a strategy that is the best for a player regardless of what strategies other players use, leading to an optimal outcome for the player employing it.

Optimal

The most favorable condition or level of efficiency at which the desired outcome or operation is most effective or functional.

Opponent

An individual or group that competes against or disagrees with another in a contest, conflict, or debate.

Cooperative Advertising

A cost-sharing arrangement whereby both a supplier and retailer contribute to the advertising cost to increase demand for a product.