Other things the same,if a country raises its saving rate,when is productivity growth higher?
A)as the economy moves toward the long run and in the long run.
B)as the economy moves toward the long run,but not in the long run.
C)in the long run,but not as the economy moves toward the long run.
D)neither as the economy moves toward the long run,nor in the long run.

Question

Quizplus · Accepted Answer

Raising the saving rate increases capital accumulation, leading to higher productivity growth as the economy moves toward the long run. However, in the long run, the growth rate stabilizes as diminishing returns to capital set in.

Other Things the Same,if a Country Raises Its Saving Rate,when