Consider a country whose economic structure
matches the assumptions of the classical model.
After reading a recent best-seller documenting a
growing population of low-income elderly people
who were ill prepared for retirement, most resi-
dents of this country decide to increase their sav-
ing at any given interest rate. Explain whether or
how this could affect the following:
a. The current equilibrium interest rate
b. Current equilibrium real GDP
c. Current equilibrium employment
d. Current equilibrium investment
e. Future equilibrium real GDP