Consider two countries,Country A and Country B,that are alike in most respects.However,the saving rates in the two countries differ.Country A's saving rate is greater than Country B's saving rate.Which of the following statements is true?

Question

Quizplus · Accepted Answer

Saving is an important determinant of physical capital accumulation, which is a key factor in economic growth. With Country A having a higher saving rate, it will have more funds available for investment in physical capital. This will stimulate economic growth and increase the rate of physical capital accumulation. Therefore, physical capital accumulation will occur faster in Country A than in Country B. This, in turn, will contribute to the long-term growth of the economy in Country A.

Consider Two Countries,Country a and Country B,that Are Alike in Most