Scenario: Consider Two Countries: Country a and Country B

Scenario: Consider two countries: Country A and Country B. Both countries have the identical aggregate production functions, populations, and efficiency units of labor, but they have different saving rates. The saving rate is higher in Country A than in Country B.
-Refer to the scenario above.If both economies have the same depreciation rate,then which of the following statements will be true?

A) Country A will have a greater physical capital stock and a lower GDP than Country B.
B) Country A will have a greater physical capital stock and a higher GDP than Country B.
C) Country A will have a lower physical capital stock and a higher GDP than Country B.
D) Country A will have a lower physical capital stock and GDP than Country B.

Correct Answer:

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