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If an Economy Is in a Steady State with a Saving

Question 49

Multiple Choice

If an economy is in a steady state with a saving rate below the Golden Rule level, efforts to increase the saving rate result in:


A) both higher per-capita output and higher per-capita depreciation, but the increase in per-capita output would be greater.
B) both higher per-capita output and higher per-capita depreciation, but the increase in per-capita depreciation would be greater.
C) higher per-capita output and lower per-capita depreciation.
D) lower per-capita output and higher per-capita depreciation.

Correct Answer:

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