In the Long Run,an Increase in the Saving Rate

question 15

Multiple Choice

In the long run,an increase in the saving rate

• A)doesn't change the level of productivity or income.
• B)raises the levels of both productivity and income.
• C)raises the level of productivity but not the level of income.
• D)raises the level of income but not the level of productivity.

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Definitions:

Interest Rate

The fraction of the borrowed amount a borrower needs to pay as interest to the lender.

Savings Account

A deposit account held at a bank or other financial institution that provides principal security and a modest interest rate.

Behavioral Economic Explanation

An interpretation derived from behavioral economics, focusing on psychological, social, and cognitive factors affecting economic decisions.

Macroeconomics

The branch of economics that studies how the aggregate economy behaves, focusing on indicators like GDP, unemployment rates, and inflation.