In the United States it is clear that if a dollar were diverted from present consumption to present investment,the return on that investment would be ________ to reward the deferral of consumption,meaning that overall economic welfare would rise with ________ in national saving.

Question

Quizplus · Accepted Answer

This question is based on the concept of marginal product of capital. According to the theory, if a dollar is invested in capital, it will generate a return (or marginal product) based on the overall productivity of the economy. In the United States, the marginal product of capital is believed to be higher than the interest rate, which means that the return on investment is more than sufficient to reward the deferral of consumption. This is because the US has a highly productive economy that can generate good returns on capital investments. As a result, an increase in national saving would lead to an increase in overall economic welfare, as it would facilitate more investment and economic growth. Therefore, the correct answer is C) more than sufficient, an increase.

In the United States It Is Clear That If a Dollar