54. Consider the long-run theory of investment, saving, and growth. Which of the following statements concerning national saving is true? An increase in the rate of saving will lead to a short-run reduction in national income, but to higher economic growth in the long run. A country's saving rate is unrelated to its growth rate. An increase in the rate of saving will lead to a reduction in consumption and therefore to both a short-run and a long-run decrease in national income. An increase in the rate of saving will cause an immediate increase in national income, but may cause a drop in national income in the long-run. An increase in the rate of saving will always be offset by a reduction in private investment.

In the long term, a rise within the demand for investment pushes up the charge per unit and…

Answered: 4. Consider the long-run theory of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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54. Consider the long-run theory of investment, saving, and growth. Which of the following statements concerning national saving is true?

		An increase in the rate of saving will lead to a short-run reduction in national income, but to higher economic growth in the long run.
		A country's saving rate is unrelated to its growth rate.
		An increase in the rate of saving will lead to a reduction in consumption and therefore to both a short-run and a long-run decrease in national income.
		An increase in the rate of saving will cause an immediate increase in national income, but may cause a drop in national income in the long-run.
		An increase in the rate of saving will always be offset by a reduction in private investment.

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