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Using the Solow model, assume the population growth rate is positively correlated with the saving rate, so that if the saving rate increases, so does
Using the Solow model, assume the population growth rate is positively correlated with the saving rate, so that if the saving rate increases, so does the population growth rate. Which of the following is true when the savings rate increases?
A.s > n+d causing K/L to rise
B.K/L rises
C.Y/L rises
D.There is a permanent reduction in the growth rate of GDP after the economy moves to the new steady state.
E.all of the above are true.
F.only A, B and C are true.
G.only B and C are true.
H.none of the above is true.
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