CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

According to the neoclassical growth theory, if there is an increase in the savings rate, in the long run capital per capita will ______ (increase? decrease? remain the same?), output per capita will ______ (increase? decrease? remain the same?), and the economy's growth rate will ______ (increase? decrease? remain the same?).
Correct Answer: increase, increase, remain the same.

User Contributed Comments 3

User Comment
dipz output per capita will increase at a decreasing rate.
kodali The economy still grows, but the rate at which it grows remails the same. Note the difference between growth and rate of growth.
quanttrader more technological change required for further growth, due to diminishing marginal productivity of capital--
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