According to Solow’s neo-classical model of growth, an increase in a country’s savings rate will cause an ____________.
1
Increase in the level of income per head in the short run but not in the long run
2
Increase in the rate of growth in the short run but not in the long run
3
Increase in both income per head levels and growth rates in the long run
4
Increase in neither income per head levels nor growth rates in the long run