Question

Suppose there are two countries that are identical in every way with the following exception: Country A has a higher saving rate than country B. Given this information, we know with certainty that:

A) the level of consumption per worker will be higher in A.
B) the growth rate will be higher in A than in B
C) the growth rate will be the same in the two countries.
D) the level of consumption per worker will be higher in B.

Answer 1

The level of consumption per worker will be higher in Country B.

Step-by-step explanation:

Given that Country A has a higher saving rate than Country B and that the two countries are otherwise identical, we can conclude that the level of consumption per worker will be higher in Country B. This is because a higher saving rate in Country A means that a larger portion of income is being saved and not immediately consumed. Therefore, Country B will have a higher level of consumption per worker.