If a country increases its savings rate, the steady-state equilibrium

If a country increases its savings rate, the steady-state equilibrium level of:

A) GDP will increase. B) investment will decrease.
C) capital stock will decrease. D) efficiency units of labor will increase.

Consider two economies: A and B. Both the countries have access to the same aggregate production function and have the same population and same efficiency units of labor, but have different saving rates. The savings rate is higher in country A in comparison to country B.

ANSWER

A