Why is the effect of saving so controversial to economists?
A) Increased saving always has an unambiguously positive effect on the economy
B) Increased saving always has an unambiguously negative effect on the economy
C) Increased saving may hurt the economy in the short run but help it in the long run
D) Decreased saving my hurt the economy in the short run but help it in the long run
E) Because different schools of economic thought use different definitions

Question

Quizplus · Accepted Answer

Increased saving may lead to decreased consumer spending, which can slow economic growth in the short run. However, in the long run, increased saving can lead to more investment in the economy and higher productivity, which can boost economic growth. This is why the effect of saving is controversial among economists, as some believe the short-term costs are too high, while others believe the long-term benefits are worth it.

Why Is the Effect of Saving So Controversial to Economists