Suppose a recent budgetary policy results in an increase in the national saving rate. Such a change in the saving rate will not affect which of the following variables in the long run?
A) The rate of growth of capital per worker.
B) The level of output.
C) The level of investment.
D) Capital per worker.
E) Output per worker.

Question

Quizplus · Accepted Answer

In the long run, the rate of growth of capital per worker is primarily determined by technological progress and not by the national saving rate. The saving rate can affect the level of capital per worker, total output, investment, and output per worker by enabling more resources to be diverted to investment, but it does not directly affect the growth rate of these variables in the long run, which is driven by technological advancements and improvements in efficiency.

Suppose a Recent Budgetary Policy Results in an Increase in the National