Use the Table Below to Answer This Question If the Data Support the Neoclassical Growth Theory,we Would Expect

question 340

Multiple Choice

Use the table below to answer this question. The data show national savings rates as a percentage of GDP; the growth rate of real GDP per person; and birth rates in 2006. $\begin{array}{c}\begin{array}{|l}\hline\\\\\text {Country}\\\hline\text {Japan}\\\hline\text {Canada}\\\hline\text {Germany}\\\hline\text {U.S.}\\\hline\end{array}\begin{array}{|c}\hline\\\text {National Saving}\\\text { ( } \% \text { of } \mathrm{GDP}) \\\hline28\\\hline24\\\hline 23\\\hline 14\\\hline\end{array}\begin{array}{|l|}\hline \text { Growth rate}\\ \text { of real GDP}\\ \text { per person}\\\hline 1.6\\\hline 2.6\\\hline 1.9\\\hline 1.9\\\hline\end{array}\begin{array}{l|}\hline\\\\\text { Birth Rate}\\\hline9.96\\\hline 11.4\\\hline9.35\\\hline 14.2\\\hline\end{array}\end{array}$

If the data support the neoclassical growth theory,we would expect to see

• A) Japan with the highest economic growth rate because the high saving means that more capital is accumulated.
• B) the United States with the highest economic growth rate because a lower savings rate means more income is spent on consumption.
• C) Canada with the highest economic growth rate because it has the highest real GDP per person.
• D) the United States with the highest economic growth rate because it has the highest birth rate.

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