Fretonia and Libstien are the same except Fretonia has a larger capital stock.Both countries undertake policies that raise their saving rates to the same higher level.We would expect that
A)both countries would have permanent increases in their growth rates,but the increase would initially be larger in Fretonia.
B)both countries would have permanent increases in their growth rates,but the increase would initially be smaller in Fretonia.
C)both countries would have temporary increases in their growth rates,but the increase would be larger in Fretonia.
D)both countries would have temporary increases in their growth rates,but the increase would be smaller in Fretonia.

Question

Quizplus · Accepted Answer

The Answer of Fretonia and Libstien are the same except Fretonia has a larger capital stock.Both countries undertake policies that raise their saving rates to the same higher level.We would expect that
A)both countries would have permanent increases in their growth rates,but the increase would initially be larger in Fretonia.
B)both countries would have permanent increases in their growth rates,but the increase would initially be smaller in Fretonia.
C)both countries would have temporary increases in their growth rates,but the increase would be larger in Fretonia.
D)both countries would have temporary increases in their growth rates,but the increase would be smaller in Fretonia.

Fretonia and Libstien Are the Same Except Fretonia Has a Larger