Suppose two countries are identical in every way with the following exception.Economy A has a higher saving rate than economy B.Given this information,we know with certainty that
A)steady state consumption in A is higher than in B.
B)steady state consumption in A is lower than in B.
C)steady state consumption in A and in B are equal.
D)steady state growth of output per worker is higher in A than in B.
E) none of the above

Question

Quizplus · Accepted Answer

The steady state consumption and growth rates depend on various factors, and a higher saving rate does not guarantee a specific outcome for steady state consumption or growth of output per worker.

Suppose Two Countries Are Identical in Every Way with the Following