Suppose Turkey increases its saving rate.In the long run
A)the growth rates of productivity and real GDP per person increase.
B)productivity and real GDP per person increase.
C)the growth rate of productivity increases,and real GDP per person increases.
D)productivity increases,and the growth rate of real GDP per person increases.

Question

Quizplus · Accepted Answer

In the long run, an increase in the saving rate leads to higher levels of capital accumulation, which raises productivity and real GDP per person. However, it does not permanently increase the growth rates of these variables.

Suppose Turkey Increases Its Saving Rate