Starting from a steady-state situation, if the saving rate increases, the rate of growth of capital per worker will:
A) increase and continue to increase unabated.
B) increase until the new steady state is reached.
C) decrease until the new steady state is reached.
D) decrease and continue to decrease unabated.

Question

Quizplus · Accepted Answer

The Answer of Starting from a steady-state situation, if the saving rate increases, the rate of growth of capital per worker will:
A) increase and continue to increase unabated.
B) increase until the new steady state is reached.
C) decrease until the new steady state is reached.
D) decrease and continue to decrease unabated.

Starting from a Steady-State Situation, If the Saving Rate Increases