Suppose there are two countries that are identical with the following exception.The saving rate in country A is greater than the saving rate in country B.Given this information,we know that in the long run
A)output per capita will be greater in B than in A.
B)output per capita will be greater in A than in B.
C)economic growth will be higher in A than in B.
D)more information is needed to answer this question.

Question

Quizplus · Accepted Answer

Higher savings rate leads to higher investment and capital accumulation, which in turn leads to higher output per capita in the long run. Therefore, country A with the higher saving rate will have greater output per capita than country B.

Suppose There Are Two Countries That Are Identical with the Following