It Is Likely That a Small Increase in a Country's

question 98

Multiple Choice

It is likely that a small increase in a country's saving rate will have

• A) a large effect on per capita real GDP many years later because the increase in saving leads to a slightly higher rate of economic growth which has large effects over time.
• B) a large effect on per capita real GDP immediately because the increase in saving leads to a much larger rate of economic growth.
• C) a small effect on per capita real GDP many years later because the increase in saving will have very little effect on the growth rate.
• D) a small effect on per capita real GDP many years later because the increase in saving will be offset in later years by a decrease in the saving rate.

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