In the neoclassical model, an increase in the savings rate
a. causes a more than proportionate increase in the capital to labor ratio.
b. results in a less than proportionate increase in the capital to labor ratio.
c. results in a proportionate increase in the growth rate of output.
d. None of the above
Question 2
Which of the following statements is (are) correct? During the existence of the Euro (1999-),
a. borrowing from abroad financed large excesses of merchandise imports over exports in the U.S.
b. the United States has continued to be the world's largest debtor nation.
c. the dollar initially appreciated but then depreciated strongly since 2001 against the euro.
d. All of the above
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