In the Long Run,an Increase in the Saving Rate in a Steady-State

question 31

Multiple Choice

In the long run,an increase in the saving rate in a steady-state economy will cause

• A)an increase in the capital-labor ratio and an increase in consumption per worker.
• B)an increase in the capital-labor ratio and a decrease in consumption per worker.
• C)a decrease in the capital-labor ratio and a decrease in consumption per worker.
• D)a decrease in the capital-labor ratio and an increase in consumption per worker.

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Definitions:

Feasibility Study

An assessment of the practicality and potential success of a proposed project or business, analyzing variables such as cost, risk, and benefits.

Action

A process or act of doing something, usually to achieve an intended outcome or goal.

Detailed Financial Projections

Comprehensive forecasts about a company’s future financial status and performance over a period of time.

Entrepreneurial Activities

Actions aimed at initiating, designing, launching, and running a new business or enterprise, often in the face of financial risk.