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Newlandia and Oldia are two countries with the same production function and growth rate in ...

Newlandia and Oldia are two countries with the same production function and growth rate in technology and are initially at their steady-states. Oldia's savings rate increases. As a result, in the short to medium term, Oldia's growth rate will be ________ than Newlandia's because after the savings rate increase, Oldia's rate of capital accumulation will be ________ than capital depreciation until it reaches its new steady state.

▸ lower; higher

▸ Higher; higher

▸ same as; lower

▸ lower; lower

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Macroeconomics

Edition: 3^rd

Authors: Acemoglu, Laibson, List

Read 74 times

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