Starting from a Steady-State Situation, If the Saving Rate Increases

question 38

Multiple Choice

Starting from a steady-state situation, if the saving rate increases, the rate of growth of capital per worker will:

• A) increase and continue to increase unabated.
• B) increase until the new steady state is reached.
• C) decrease until the new steady state is reached.
• D) decrease and continue to decrease unabated.

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Definitions:

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A broad expanse of flat land, much of it covered in prairie, steppe, and grassland, that lies west of the Mississippi River tallgrass prairie in the United States and east of the Rocky Mountains.

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