Which of the following is most important for long-run growth and a healthy economy?
A) a low rate of household savings and a high rate of consumption
B) a high rate of both savings and consumption
C) a high rate of government expenditures financed by borrowing
D) high tax rates and budget surpluses

Question

Quizplus · Accepted Answer

A high rate of both savings and consumption is important for long-run growth and a healthy economy. Savings provide funds for investments which can lead to productivity gains and economic growth. Consumption drives demand for goods and services, which in turn creates jobs and increases economic activity. A balance between savings and consumption is necessary for sustainable growth. The other options are not ideal as they can lead to negative effects on the economy such as decreased investment, increased debt, and reduced consumer spending.

Which of the Following Is Most Important for Long-Run Growth