Suppose that two countries are exactly alike in every respect except that the citizens of country A have a higher saving rate than the citizens of country B.

a. Which country will have the higher level of output per worker in the steady state? Illustrate graphically.
b. Which country will have the faster rate of growth of output per worker in the steady state?

Question

Suppose that two countries are exactly alike in every respect except that the citizens of country A have a higher saving rate than the citizens of country B.

a. Which country will have the higher level of output per worker in the steady state? Illustrate graphically.
b. Which country will have the faster rate of growth of output per worker in the steady state?

Quizplus · Accepted Answer

The Answer of Suppose that two countries are exactly alike in every respect except that the citizens of country A have a higher saving rate than the citizens of country B.

a. Which country will have the higher level of output per worker in the steady state? Illustrate graphically.
b. Which country will have the faster rate of growth of output per worker in the steady state?

Suppose That Two Countries Are Exactly Alike in Every Respect