Figure 10-5
-In the figure above, suppose that the economy's initial steady-state point is A. An increase in the rate of national saving changes the steady-state point to

Question

Figure 10-5 
-In the figure above, suppose that the economy's initial steady-state point is A. An increase in the rate of national saving changes the steady-state point to

Quizplus · Accepted Answer

An increase in the rate of national saving shifts the savings curve upward, which increases the steady-state level of capital and output. As a result, the new steady-state point is at point B, which has a higher level of both capital and output compared to point A.

Figure 10-5 -In the Figure Above, Suppose That the Economy's Initial Steady-State