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In the long run, a higher saving rate:

A. Does not lead to a higher level of income because of deterioration in labour productivity.

B. Always leads to a higher level of productivity because of increasing returns to scale.

C. Does not always lead to a higher growth rate of output because of decreasing returns to capital.

D. Always leads to a higher growth rate of output because of improvement in the stock of capital.

 

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Mahe Alam
Mahe AlamLv10
19 Jan 2021

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Related questions

What is the effect of a higher saving rate in the long-run?

a.

It decreases the capital stock.

b.

People must consume less in the future.

c.

It increases productivity.

d.

It leads to higher growth in real GDP.

If a country's saving rate increases, then in the long run: 

A. the growth rate of productivity and grow real GDP per person are both higher.

B. neither growth rate of productivity nor growth rate of real GDP is higher.

C. real GDP per person is higher but productivity is not higher 

D. productivity is higher bt GDP per person is not higher. 

According to estimates presented in the textbook, which of the following factors made the smallest contribution to U.S. growth between 1928 and 1997?

A) Technology.
B) Human capital.
C) Physical capital.
D) Labor.

According to economist Hernando DeSoto, the lack of formal property rights in many poor countries limits economic growth because informal property rights:

A) lead to excessive investment in physical, social, and human capital.
B) limit the amount that businesses and households can borrow.
C) result in excessive government regulation.
D) decrease the labor force participation rate.

The theory of convergence depends on the assumption that:

A) population growth falls to replacement levels in all nations.
B) factors of production are mobile across borders.
C) technological advancement slows.
D) production functions have constant returns to scale.

The surge in foreign direct investment experienced by China and India in the early 2000s can best be explained by:

A) their higher marginal productivity of capital, which leads to lower production costs.
B) their lower marginal productivity of capital, which leads to lower production costs.
C) the limits they impose on factor mobility.
D) technological agglomeration.

The idea behind Say's Law is that people work because:

A) they like to work.
B) they want to buy things.
C) they want to accumulate wealth.
D) work gives them social status.

People's knowledge is a type of capital, called human capital.

A) True
B) False

The law of diminishing marginal productivity applies whenever:

A) output is increased.
B) all inputs are increased.
C) only one input is increased.
D) decreasing returns to scale are present.

13.

The theory of convergence argues that poor nations should, if they pursue the right policies,

A) grow at the same rate as rich nations.
B) grow faster than rich nations.
C) develop the same social-welfare structures as rich nations.
D) stop their exploitation by the rich nations.

14.

If increasing returns to scale exist, then an increase in output of exactly 3 percent is most likely to be produced by:

A) a decrease in all inputs of 3 percent.
B) an increase in all inputs of less than 3 percent.
C) an increase in all inputs of 3 percent.
D) an increase in all inputs of more than 3 percent.

15.

The production function is best represented in the following form:

A) Output = A.
B) Output = f(Labor, Capital, Land).
C) Output = A%u2022f(Labor, Capital, Land).
D) Output = [A%u2022f(Labor, Capital, Land)]b.

16.

The effect of economic growth generally has been to make:

A) the poor poorer and the rich richer.
B) the poor richer and the rich poorer.
C) all income levels richer.
D) the rich richer but not affect the poor.

Scale economies describe what happens to output when:

A) one input changes.
B) all inputs change by the same percentage.
C) technology changes.
D) institutions change.

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