In the Harrod-Domar Growth Model,if the Saving Rate S Increases,what

question 10

Multiple Choice

In the Harrod-Domar growth model,if the saving rate s increases,what will happen to the long-run growth rate of GDP?

• A) it increases
• B) it decreases
• C) it stays constant
• D) we cannot determine the long-run growth rate of GDP without more information

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.

International Trade

The exchange of goods, services, and capital among various countries and territories, crossing their international borders.

Absolute Advantage

The ability of a country, individual, or group to produce a good or service more efficiently than competitors, using fewer resources.

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Small semiconductor devices that contain electrical circuits capable of processing data or controlling devices and processes.