The key to sustained economic growth is increasing labor ...

[Metfan725]

The key to sustained economic growth is increasing labor productivity.
 
  Indicate whether the statement is true or false

Question 2

Japan has a fairly high saving rate and the level of saving in Japan is above domestic investment. Use the saving and investment equation to explain what Japan is doing with this excess of saving above domestic investment.
 
  What will be an ideal response?

[courtney_bruh]

Answer to Question 1

TRUE

Answer to Question 2

In an open economy, the saving and investment equation implies that a country's national saving must always equal domestic investment plus net foreign investment or (S = I + NFI). Japan's saving in excess of domestic investment implies that net foreign investment is positive for Japan so that Japan must be investing in other countries. Companies like Toyota, Honda, and Nissan have built plants in the United States.