Asked by Jill Colleen Argame on Jun 05, 2024
Verified
Other things the same, a country that increases its savings rate will have
A) higher future capital and higher future real GDP per person.
B) higher future capital but not higher future real GDP per person.
C) higher future real GDP per person but not higher future capital.
D) neither higher future capital nor higher future real GDP per person.
Real GDP Per Person
Real GDP per person measures the value of all finished goods and services produced within a country in a specific period, adjusted for inflation, per capita.
Savings Rate
The proportion of disposable income that is saved by households rather than spent, often expressed as a percentage.
- Acquire knowledge about the determinants of improved productivity and their relevance to economic progress.
Verified Answer
SR
Stephanie RiggleJun 10, 2024
Final Answer :
A
Explanation :
An increase in the savings rate allows more resources to be diverted towards investment in capital goods. This leads to an accumulation of capital, which in turn enhances productivity and results in higher future real GDP per person.
Learning Objectives
- Acquire knowledge about the determinants of improved productivity and their relevance to economic progress.