Other things the same,if a country raises its saving rate,when is growth of real GDP per person 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

Increasing the saving rate leads to higher investment, which boosts growth as the economy moves toward the long run. However, in the long run, the growth rate returns to its steady state, and the level of GDP per person is higher, but the growth rate is not.

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