Suppose There Is an Increase in the Saving Rate

question 56

Essay

Suppose there is an increase in the saving rate.Explain what effect this will have on output,output per worker,the rate of growth of output,and the rate of growth of output per worker.

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Definitions:

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period.

Labor Force

The total number of people employed or seeking employment in an economy at a given time.

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to produce goods or services and achieve its objectives.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, like labor.