Chapter6: How Statisticians Measure Inflation
Section: Chapter Questions
Problem 1TY
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1
Transcribed Image Text:There are two economies. Total factor productivity (TFP) is the same across both economies. One economy has a saving rate of 0.4 the other has a saving rate of 0.10. in the long run (called steady state) they will have
the same growth rate of income per capita.
The higher saving economy will grow at a faster rate
The higher saving economy will grow at the slower rate
O Income per capita is higher in the lower saving economy
O None of the above
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