All else equal, by saving more, a country
A)has more resources for capital goods. The increase in capital raises productivity.
B)has more resources for capital goods. The increase in capital reduces productivity.
C)has fewer resources for capital goods. The decrease in capital raises productivity.
D)has fewer resources for capital goods. The decrease in capital reduces productivity.

Question

Quizplus · Accepted Answer

Saving more means that there are more resources available for investment in capital goods. This leads to an increase in capital and ultimately raises productivity. Therefore, choice A is the correct answer. Choices B, C, and D are incorrect because they suggest that saving more leads to a decrease in productivity or capital, which is not the case.

All Else Equal, by Saving More, a Country