-Refer to Figure 8A.2. An increase in the saving rate is represented by

Question

Quizplus · Accepted Answer

An increase in the saving rate is represented by a shift in the savings function, which is typically shown as a shift from one savings curve to another (e.g., from S?Y to S?Y), indicating a change in the savings behavior or rate at all levels of income or output. This reflects a change in the economy's overall propensity to save rather than a movement along a given curve, which would indicate a change in income or output levels.