Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real

image text in transcribed
Suppose that there are diminishing returns to capital. Suppose also that two countries are the same except one has less capital and so less real GDP per person. Suppose that both increase their saving rate from 3 percent to 4 percent. Which of the following will happen in the long run? Select one: C) Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with more capital. O Both countries will have higher levels of real GDP per person, and the temporary increase in growth in the level of real GDP per person will have been greater in the country with less capital. O Both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with more capital. O Both countries will have permanently higher growth rates of real GDP per person, and the growth rate will be higher in the country with less capital

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Mining And The State In Brazilian Development

Authors: Gail D Triner

1st Edition

1317323580, 9781317323587

More Books

Students also viewed these Economics questions