In the classical model,less consumption and more savings would

Question

Quizplus · Accepted Answer

In the classical model, higher savings rates lead to increased investment and thus increased aggregate supply and output in the long run, without affecting the price level. This is because higher savings rates will mean that there is more money available for investment in capital goods and technology, leading to an increase in productivity and potential output. Therefore, less consumption and more savings would increase aggregate supply and output in the classical model.

In the Classical Model,less Consumption and More Savings Would