Our model of long- run economic growth suggests that:
A) a higher rate of saving in Australia cannot do much to increase the Australian growth rate over the next two decades.
B) the Australian growth slowdown since 1950 has been caused largely by low saving in Australia.
C) saving in Australia has exceeded the golden- rule level.
D) an increase in the Australian saving rate is likely to raise consumption in the future.
E) an increase in the Australian saving rate is likely to reduce consumption in the future.

Question

Quizplus · Accepted Answer

An increase in the saving rate can lead to more investment in capital, which can boost productivity and economic growth. Over time, this can lead to higher levels of consumption as the economy grows.

Our Model of Long- Run Economic Growth Suggests That