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

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Definitions:

Corporate

Pertaining to a corporation, which is a legal entity recognized by law as separate from its owners and having its own rights, privileges, and liabilities.

Corporate Veil

A legal concept that separates the identity of a corporation from its shareholders, protecting them from being personally liable for the company's debts or legal obligations.

De Facto Corporation

A business that operates as a corporation without formal legal acknowledgment but is treated as such for some purposes.

Corporation's Bylaws

The written rules for conduct of a corporation, detailing the rights and obligations of the directors, officers, and shareholders.