In the long run, an increase in the saving rate in a steady-state economy will cause A) an increase in the capital-labour ratio and a decrease in consumption per worker

Economics Jan 28, 2021

In the long run, an increase in the saving rate in a steady-state economy will cause A) an increase in the capital-labour ratio and a decrease in consumption per worker. B) an increase in the capital-labour ratio and an increase in consumption per worker. C) a decrease in the capital-labour ratio and a decrease in consumption per worker. D) None of above.

Expert Solution

The correct option is B "an increase in the capital labor ratio and an increase in the consumption per worker".

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