Comparing steady states,which of the following is a result of a permanent increase in the saving rate,but is not a consequence of a one-time increase in productivity?
A)an increase in consumption per worker
B)a decrease in the marginal product of capital
C)an increase in output per worker
D)an increase in the growth rate of output

Question

Quizplus · Accepted Answer

A permanent increase in the saving rate leads to a higher capital stock, which decreases the marginal product of capital due to diminishing returns. A one-time increase in productivity does not have this effect.

Comparing Steady States,which of the Following Is a Result of a Permanent