Consider the effects of an increase in the saving rate on the United States capital-labor ratio, according

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Consider the effects of an increase in the saving rate on the United States capital-labor ratio, according to the Solow model.

a) What would be the immediate effect of a saving rate increase on the capital-labor ratio? What would be the long run effect?

b) Do you think it is worth it to increase the saving rate? If so, by how much? (Would you save 95% of your income?)

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Macroeconomics Policy And Practice

ISBN: 9781137393951

1st Edition

Authors: Frederic S. Mishkin

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Question Posted: Nov 11, 2024 05:00 AM

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Consider the effects of an increase in the saving rate on the United States capital-labor ratio, according

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Macroeconomics Policy And Practice

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