Consider two economies: A and B that are completely similar, except th

Consider two economies: A and B that are completely similar, except their savings rate. The savings rate in economy A is greater than the savings rate in economy B. Which of the following statements is true?

A) Capital accumulation will be faster in economy B in comparison to economy A.
B) Capital accumulation will be faster in economy A in comparison to economy B.
C) Rate of capital accumulation will be the same in both economies.
D) Growth rate in country B is likely to be higher than the growth rate of country A in the long-run.

ANSWER

B