Figure 4.1
Determinants
of k/k
-In Figure 4.1 if the saving rate increases, then
A)the curve s + n increases.
B)the curve s + n becomes steeper.
C)the curve s + n decreases.
D)the curve s + n becomes flatter.

Question

Figure 4.1
Determinants
of  k/k 
-In Figure 4.1 if the saving rate increases, then
A)the curve s + n increases. 
B)the curve s + n becomes steeper. 
C)the curve s + n decreases. 
D)the curve s + n becomes flatter.

Quizplus · Accepted Answer

An increase in the saving rate means that households are saving more of their income and therefore consuming less, which results in an increase in national saving (S). This would shift the S + n curve upwards, as shown in Figure 4.1.

Figure 4.1 Determinants