Suppose an Economy Experiences an Increase in Its Saving Rate

question 156

Multiple Choice

Suppose an economy experiences an increase in its saving rate.The higher saving rate leads to a higher growth rate of productivity

• A)in the short run,but not in the long run.
• B)in the long run,but not in the short run.
• C)in both the short run and the long run.
• D)in neither the short run nor the long run.

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Definitions:

Investor Aversion

A reluctance or aversion among investors to take on risky investments, preferring safer, more predictable returns instead.

Capital Gains

The increase in the value of an investment or real estate that gives it a higher worth than the purchase price.

Tax Treatment

The application of revenue law to a financial transaction, affecting how it is taxed.

Growth

Refers to the increase in economic value, size, or output of an entity, often considered for investments or economies over time.