Figure 7-1

question 152

Multiple Choice

Figure 7-1. On the horizontal axis, K/L represents capital (K) per worker (L) . On the vertical axis, Y/L represents output (Y) per worker (L) .

-Refer to Figure 7-1. The shape of the curve is consistent with which of the following statements about the economy to which the curve applies?

• A) In the long run, a higher saving rate leads to a higher level of productivity.
• B) In the long run, a higher saving rate leads to a higher level of income.
• C) In the long run, a higher saving rate leads to neither a higher growth rate of productivity nor a higher growth rate of income.
• D) All of the above are correct.